Conference nyoss1::market_investing

    When I was very young, I inherited $20,0000 from a great-aunt. My
    father invested the money for me in Keystone K-2 (actually it had a
    different name then). Twenty years later when he told me about it I
    went to cash out expecting the $20,000 must have run up to some serious
    bucks by now. To my dismay, the value of the account AFTER 20 YEARS,
    was just over $600. Doing a little research into the fund proved to me
    that over the years management of the fund must have been pretty poor
    as annual returns were pitiful (and often negative). Maybe management
    is different by now, but I wouldn't put my money in ANY Keystone fund
    EVER.
    
    As for these advisers you've talked to. I wouldn't listen to anything
    they have to say as everything they suggest to you is suggested simply
    as a way for them to make money. 
    
    There is nothing wrong with annuities per se. They are a great way to
    put away tax deferred money over the $2000 limit imposed by IRA's. But
    you can set up an annuity on your own with companies that have better
    reputations, such as the Scudder Horizon plan. The fact that one of the
    companies they recommended didn't even have a prospectus should be a
    warning.
    
    I would avoid these types of financial planners at all costs. Do a
    little research and manage your own investments. Those guys don't have
    your best interest in mind no matter how much they claim to. No one
    will ever be as concerned about your financial well being as yourself.
    DO your own research, follow your investments on regular basis, don't
    be afraid to make changes to your portfolio when a better opportunity
    arises, and you'll be better off in the long run.
    
    Just my humble opinion.
    
    -Rob

    I don't know anything about Keystone (except I've heard about this
    name), so I can't really comment on them. But, I agree with what .1
    said. Learn all the ins and outs about investing yourself. It's you and
    only you have the best interest in making your investment grow. I can
    listen to all kinds of "advises". But, always put yourself in the
    "driver's seat" - you have to be in control. You make all the final
    decisions, not financial advisors nor anyone else. 
    
    However, I do not see you mentioned in your note about how far you are
    from your retirement and how young is your son (ie. how soon does he
    need the money you saved for him)? These are important factors as they
    will greatly affect your investment decisions on what vehicle you need
    to take.
    
    It's my $.02
    
    Mike

RE:.0 by DPDMAI::RESENDE "Pick up the pieces & build a winner!"


> (Q1)  What do you think about these financial planners that are
> "free" (i.e. the planner is paid by the institution)?

It's in their interest to sell you what pays the highest commission,  and not
what is the best idea for you..  NOT good.

    
> (Q2)  Our IRAs are currently in Vanguard funds (no-load) that charge $10/yr 
> management fees and that's all.   Being IRAs they are already tax-deferred.
> So what do we stand to gain (or lose) by taking Step #1?

Compare:
Fee for an IRA			$10 a year Vanguard	VS What?
Management charges		N% Vanguard		VS What?
Load				0% Vanguard		VS What?

Now you know how this guy is getting paid.  

Your gain,  I don't see one.  


> (Q6)  Should we turn-tail and run from these people as fast as we can?

Looks like a pretty good idea to me.


Phil

    If you take your money from the IRA and put it into an annuity wont you
    have to pay penalty and tax or is it considered a rollover?
    What did this "financial planner" say?  Sounds to me that the only
    financial planning he is doing is his own.

    re .0, .3
    
    Use the general information given to you (which you listed in 40.0)
    and otherwise ignore what the salesman told you.  I'd stick with
    the Vanguard funds.  .3's advice to run when you see such salespeople
    is good advice.
    
    As far as your son's money goes, you might want to read the notes
    I wrote in the old INVESTING about the trust for my son.  Based on
    your notes in PARENTING, we both have very young children and so
    have similiar goals.
    
    The policy and asset mix I recommend for people like me (under 40
    but only just, small children, work for DEC, already have a house)
    is roughly:
    
    	money market -- several months' income
    	low-risk stock funds --  20% (e.g. balanced funds mostly in bonds)
    	high-risk stock funds -- 60%
    	international/foreign -- 20%
    
    	Be in the DEC stock plan for the full 10%, sell as soon as you
    	    get the stock, turn money over to funds above.
    
    	SAVE plan in the stock funds, investing at the maximum 8%.
    
    	College money for children in trusts, in a mix of high-risk and
    	    international/foreign funds.
    
    	Wills, term life insurance, disability insurance as well as
    	    an umbrella liability policy.
    
    I'm using T. Rowe Price's International Stock Fund, 20th Century
    Growth, Vanguard's Index 500 and Wellesley (something--the balanced
    bond-heavy fund) for the bulk of this.  I have small amounts in
    Fidelity's OTC and Magellan (bought before I realized I didn't
    have to pay 3%), and some in the Van Eyck gold fund which used
    to be International Investors, bought as a kind of insurance against
    inflation in the days before every company offered gold funds.
    
    You may note that this is a growth-heavy mix: I'm assuming that college
    and retirement are what I'm saving for, and that I have almost twenty
    years for growth before I have to spend this money.  As that period
    runs out I plan to move to less aggressive growth funds.  As time goes
    on, I plan to shift more of the assets to the international/foreign
    area, as I think demographic pressures will reduce the performance 
    of the US economy starting ten years from now.
    
    			-John Bishop

re: 39.0

>    We were advised the following:
>    
>    (1)  Take our IRA moneys out of the growth mutual funds and CDs where
>    they now (very little in CDs) and put them in a variable annuity
>    (American Legacy II) and not to invest further in IRAs.  The entire
>    initial amount would go into the fixed portion of the annuity currently
>    paying >7% and equal 1/12th amounts would be moved to a growth mutual
>    fund (ala dollar cost averaging) over the year.  ...
      
      (a)  Moving  your  IRA investment from a growth mutual fund may or
      may not be good advice.  It depends on the performance of the fund
      you  currently own, and on your analysis of how that fund (and the
      market as a whole) will perform in the future.
      
      (b) There is nothing new about dollar cost averaging. (You already
      knew that, right?)
      
>                                                ...  At the end of each
>    year, the entire balance is moved back to the fixed portion of the
>    annuity and the process begins again.  They claim an average return
>    over the past 11 years of 15-17% with a goal of 12% this year.  This
>    annuity has a back-end sales charge of 6% which decreases by 1% per
>    year to 0% after 6 years.  The annuity is tax-deferred (as were our
>    IRAs).
      
      (c)  TAKING  MONEY  OUT  OF  AN  INVESTMENT FOR THE SOLE REASON OF
      RE-INVESTING IT IN THE SAME OR  SIMILAR  INVESTMENT  USING  DOLLAR
      COST  AVERAGING IS **NOT** A GOOD IDEA.  For this kid of scheme to
      work requires luck or skill in predicting  a  market  high  point,
      which  is where you take your money out and begin re-investing via
      dollar cost averaging. Nobody has the luck or skill required to do
      that repeatedly over time.  I repeat **NOBODY**.
      
      If  you follow this system blindly you will benefit if, by chance,
      the investment value is relatively high when you sell at  the  end
      of the year.  If it is relatively low you will loose!
      
      Dollar cost averaging only works on the buying side. This "system"
      is a thinly disguised attempt to get it to  work  on  the  selling
      side  too.   It  won't.  The selling side should be driven by such
      factors as:
                                
          The  investment  is  doing poorly and you don't think it will
          improve, or
          
          You [think you] have a better investment opportunity, or even
          
          You need the money, or maybe, if you're good at timing,
      
          You thing the market and your investment are about to begin a
          decline in value.
          
      Once  you've sold for a valid reason, dollar cost averaging may be
      a valid strategy for getting back into  the  market.   This  would
      depend on the reason(s) for which you sold.

>    (Q6)  Should we turn-tail and run from these people as fast as we can?
            
      In  my  opinion  this  scheme  of  taking  out  and  putting in is
      ridiculous!  If an advisor came into my home and offered  me  this
      advice, I'd politely ask the advisor to leave.  N.B. that I'd only
      be polite the FIRST time I asked the advisor to leave.  
      
      This   LOOKS   a   lot   like   "churning"  --  creating  lots  of
      purchase/sales activity in your account for the  sole  purpose  of
      generating commission income for the "advisor".
      
      BTW  -- 15-17% average over the last 11 years isn't fantastic.  It
      is good, but there  are  various  funds  and  advisors  that  have
      records at least this good. But this definitely IS a case in which
      I would NOT expect  past  performance  (read  "luck")  to  predict
      future results.

    
    	Re: .0
    
    	As a general rule of thumb, I don't listen to any financial advice
    from someone whose paycheck is based on convincing me to do something.
    Even if they were, I couldn't trust them to be suggesting things with
    my best interest at heart.
    
    							-craig

I fail to understand why you noters have such a snobby attitude and bash
financial planners as much as you do.

Comments like "FP's are out there to sell you something, whether or not you need
it", and "FP's are only concerned with making money for themselves" are just
plain stupid.

A financial planner is no different from a stockbroker, real estate agent, your
car mechanic, your accountant, your lawyer, your baby sitter, or Digital
Equipment Corporation.  All are out to sell products and/or services in order to
turn a profit.  The key is that they must also keep the customer satisfied with
well performing products and services so he comes back.

When my car breaks down, I don't run to the library and start reading all the
books on car repair to become "informed".  My car is still broken, regardless of
how much I read, so I bring it to a mechanic to be fixed.  I do, however, read
what I can about cars so I can make intelligent decisions regarding repairs and
maintenance.  It would be nonsense to be led around blindly by an auto mechanic.

The same is true with money.  The fact is most people do not understand it or
know how to handle it.  When you need advice, a financial planner is someone you
might consider to get a handle on your overall financial position.  And yes,
there are good ones and bad ones.  However, a stockbroker or an accountant may 
not be trained to understand your particular financial situation.

I bet there are 20,000 readers of this notesfile who read in earnest the
"IMHO's" and "my 2�'s" of the handful of writers who actually contribute to the
conference.  So when you suggest that you should run in the other direction when
a financial planner approaches, you are in fact telling people to stay away from
the person that might actually answer their questions and solve their problems.
I'm happy for you that you can design and execute a flawless financial plan for
yourself and your family.  I also feel terrible for those who can't.

Shame on Digital for allowing you to create and sell computer products and
services in order to turn a profit and in return provide you with a salary.

My 2�
- Chris

    re: .8
    
    I guess I am one of those that put my $.02 in this Notes. After reading
    your 'flame', I went back to read my reply again. I don't see I
    mentioned anywhere about running away from financial planners. I only
    suggested that the original noter to learn about investing as much as
    he can and make his own decisions. But, I guess I can understand your
    point that the financial planners are also trying to make a living.
    
    Mike

    re: .8
    
    There is a difference between selling a product for a profit (like
    DEC hopefully does) and the conflict of interest often present in
    the advice of a financial planner. Financial planners often present
    themselves as having evaluated alternatives and selected the ones
    that were best for your situation. What they really do is try to
    select alternatives that might solve your problem while maximizing
    their own profit.
    
    There is no problem with them making money, but unless the planner
    discloses the commisions he is receiving, it is not possible to know
    whether the advice is being given because it is good advice or because
    there is more money being made for the planner. 
    
    If the planner stated something like the following up-front I would
    have no problem: "I will attempt to select financial products meeting
    your needs from among only those products where I will be paid a good
    commision by the company offering the product. I will not consider
    products which offer me no commision even if those products may in fact
    provide better investment opportunities at lower cost. Under no
    circumstances should be advice be considered objective or independent."
    
    If the facts are on the table, then I have no problem with this
    situation.
    
    Greg
    

    re .8
    
    It's not that all financial planners are bad--what we're saying is
    they _may_ be biased.  Since you can't tell how much the way they
    are paid is influencing their advice, the wise course is to assume
    they have their best interests at heart, not yours.  In other
    words, they aren't planners of your finances--they are salespeople
    planning their own finances!
    
    It's just like car salespeople: when you deal with them, you always
    remember that they only make money if you buy a car from them, so 
    of course they are biased in favor of your buying a car--and you
    don't expect a Ford salesperson to recommend Toyota, either!
    
    That's why I (and others) recommend going to a fee-only financial
    planner, who is paid by you, not through commissions.  That's why
    we recommend that people learn the basics.  Then you can listen
    to salespeople all you want and let them try to earn their fraction
    of what you're ready to spend.
    
    The car analogy is not to a brake-down, which is an emergency and
    requires immediate fixing, but to a more general issue like "which
    car should I buy?"
    				-John Bishop

  I suppose I may have sounded a bit harsh on the FP, BUT, you are comparing 
DEC salemen who represent themselves as salesmen to Finacial Planners who
represent themselves as advisers when they are really SALESMEN.  It is this
missrepresentation that I object to.  

   There are real Financial Planners who do not sell commissioned products, 
but charge a fee for their services. I have no problem with these people. They
are performing a service and are open and honest about what they feel is best
for the client.  It is in their best interest to give the client good advise 
so that he gets repeat business.

   The SALESMEN who represent themselves as FPs are another matter.  In 
every case I have seen, they will recomend whichever products they happen to
get the most commission from whether or not it's best for the customer.  My
personal experiance was a seminar put on by A.G. Edwards.  The presenter gave
a very good presentation and made a good case for dollar cost averaging into 
stock mutual funds.  During the seminar there was no push for any specific 
product.  After the seminar, he made appointments to meet with each attendee
to discuse his financial plan and investment strategy.  When I met with him,
he found out I was in a no-load mutual fund already.  He recomended stopping 
that investing and suggested that I start an investment contract where I invest
a fixed amount each month into a mutual fund that had a 50% (that is not a typo)
front end load.  This is definately NOT in my best interest, and the only 
person who I could see benifiting from this strategy was the SALESMAN.  This
is why I raise a big stink when people start saying a free financial planner
is recomending this or that.  It is in the best interest of this type of 
FP to suggest what ever gives him the most commission. In most cases, there 
are better investments for the individual.

Brian

    re: .8
    ------
    
    I almost agreed with .8 at first but then I saw the flaws in some of the
    analogy. A car mechanic cheating his/her customers may make at most few
    hundreds more than what actually he/she deserves and most likely the
    car will get fixed. A bad/selfish FP can ruin someone's entire life
    and lifestyle by suggesting a few false moves. A car repair manual
    may tell you all but you need equipment for most jobs. FP can be
    achieved, strictly thru lot of reading and applying your common sense
    and listening to a lot of people and making your judgements. To get a 
    car or computer repaired, most times you don't have a choice but to
    take it to a repair shop. However, by asking a few simple folks like
    fellow workers or neighbors, one can get a fair opinion on what one
    can expect from a repair shop or garage person. Most of these people
    don't have FP knowledge and so you are kind of on your own when you
    take advise from a financial planner.
    
    I am sure there are good planners really helping out people's needs 
    but there are also quite a few who might create a financial disaster
    for unsuspecting folks. I think the strong negative feelings stem from
    the fact that the cost of having a bad FP is much greater than having a
    lousy car repair shop or a computer company. 
    
    This reminds me of an article in Money Mag. last month where they
    surveyed independent insurance agents on what they would recommend
    for certain type of situations and 80+% of them came up with bad
    advise which served only their or their companies' needs and would
    probably have ruined people's lifestyles who fell for their traps.
    
    - Rajesh

    
    	I also have nothing against financial consultants.  If someone needs
    help in organizing their finances and wants to use a financial
    consultant, great.  Let 'em.  (Though the more they learn beforehand,
    the better equipted they'll be to both understand what the consultant
    is recommending and can learn things from the consultant faster since
    the base knowledge is already there.  Consultants don't come cheap, so
    making good use of the time should be a goal.)
    
    	But, and this is the line that the base noter's "consultant" seemed
    to cross over, there is a major difference between a truly independant
    financial consultant that charges a flat fee per hour and a salesman
    that wants to push certain products regardless of their applicability
    to the person.  The problem is that the salesman types don't usually
    put "Salesman" on their business cards, but rather "Financial
    Consultant".  If someone isn't cognizant of the difference, they can
    get pulled into investments that really aren't suited for them or to an
    amount that exceeds a reasonable portfolio balance for them.
    
    	As to whether or not "we" (in a very broad sense) recommend too
    heavily just learning about investing, I think it depends upon the
    problem/question presented.  For simplier things, yes, the answer is
    often "read this notesfile" since the answer is probably in here.  (Or
    "there", I guess, now that the single investing notesfile has been
    broken up. :-)  The answer for complex questions is quite often "go see
    a tax attorney" or "talk to a CPA".  I think it depends upon the case
    presented.
    
    							-craig

    The real estate broker analogy breaks down too...
    
    In Massachusetts, all prospective buyers sign a form acknowledging that
    the agent is working for the *seller*, not for them.  Now, if the
    financial planners/salespeople were under the same restriction, the
    client would be forewarned....

    Well I happen to think that much of the financial planner bashing
    in this forum is quite understandable.
    
    For an analogy, I suggest asking in CARBUFFS if you should
    use your Jiffy lube coupon for a terrific deal on a 
    "complete lube job and oil change". The likely response
    would be "To hell with Jiffy Lube, do it yourself for 
    under ten bucks and you get to pick your brand of premium oil
    from Spag's". On the other hand, if you were to enquire if 
    Joe's Garage is a good place to take your clunker with the 
    busted differential, you'd get fairly reliable "yes" or "no" 
    votes for Mr. Joe. 
    
    I also happen to lean towards the rather uncharitable
    comparison to used-car dealers by another noter. I'm sure
    there are many honest used-car dealers, but I'd hate to
    have to deal with one.
    
    Just a couple of weeks back, a very close friend calls me
    and confides rather smugly that he has gotten started
    on an "investment strategy". Upon polite and anxious questioning
    by me, he intimates that he's all set, now all he has to do
    is send in his <insert_huge_$> every month to this 
    "financial planner", and he doesn't have to worry about
    the stock market going up and down. Turns out he's bought
    into a highly inflexible annuity with horrifying surrender
    charges, stiff fees all around, and invested in bonds of
    unknown quality by an insurance company I've never heard of. 
    But my friend - he's very happy. He tells me this planner is
    "very reliable, everybody at work uses his services".
    I find it ironic that a Ph.D. in statistics should have to
    pay good money to get a lousy deal on something he could
    probably do a better job of with little effort.
    
    Oh well. Come to think of it, some of the softest touches
    I've met have a doctoral degree or two.
    
    Ganesh.
        

    Well, I guess this is getting to an area that I, as the base noter,
    have been concerned about -- the pros and cons of using a fee-paid
    financial planner versus a commissioned fp.
    
    This guy stated that he didn't deal in front-end load funds, with one
    exception (yeah, I picked up on the "front-end" qualifier.  He in no
    way mentioned anything at all ever that these were back-end load funds
    with 8 and 10% sales charges.  Yeah, it's my responsibility to ask the
    questions, and to read the prospectus when there is one.  But, while
    being legally honest, I think he is over the line with these "sins of
    omission" - I think he should disclosed more.
    
    And I didn't ask how he was paid other than knowing it was via a
    "finder's fee."  Just how much detail am I entitled to as a customer?
    
    Steve

    I wonder what you all think of DEC as a Systems Integrator - an advisor 
    to tell customers the best way to assemble a solution for a business
    problem?

Comparisons of this discussion vis-a-vis DEC as systems integrator:

1)  No one mistakes DEC salesmen for "advisors"

2)  DEC's Systems Integration is fee-based and it is very obvious that
    we work for the same company that produces DEC hardware.  Financial
    Planners don't carry around "XYZ Company" badges even though they
    get paid by them (via commissions).

3)  The Systems Integration work is done by people other than the sales
    folk.  It is really obvious to a DEC customer that there is a separation
    of function, and to a large extent, vested interest.  Commission-based
    financial planners have a direct conflict of interest.  They sell and
    they also deliver the service being sold.

I am not one of the regular noters in here.  Just a read-only body.
But .18 struck a nerve.  Our systems integration work has enough opportunities
for improvement without questions regarding some largely fictitious
conflict of interest problem. <sigh>

Now back to the discussion on commission-based financial planners, please.

Karl B.

.16>                                    Turns out he's bought
.16>into a highly inflexible annuity with horrifying surrender
.16>charges, stiff fees all around, and invested in bonds of
.16>unknown quality by an insurance company I've never heard of. 

And this is the financial planners fault?

.16>But my friend - he's very happy. He tells me this planner is
.16>"very reliable, everybody at work uses his services".

Sounds like your friend might have gone in blind, based purely on the
recommendations of co-workers.  Definitely a good start when looking for a
planner, but it's only the start.  I don't know what conversation took place
between them, but it's possible that your friend went to the planner and simply
said "my co-workers think you're reliable -- invest some money for me too -- do
for me what you did for them".

Investments are only one piece of the financial planning pie.  Generally it
takes several give and take meetings for a planner to get a complete and
accurate picture of a clients financial situation -- goals, timeframe,
investment risk tolerance, insurance coverage...  If a client or planner is too
eager or doesn't ask enough questions and get satisfactory answers, I can
believe the above situation would result.  The annuity product described is a
product, not an investment plan (let alone a financial plan), but it's possible
your friend only provided limited data, and as a result only received a limited
answer.  But you also indicate your friend is very happy.  A planner could also
discuss alternatives with a client until he/she is blue in the face.  Will the
client necessarily listen if he is already happy?

It's been mentioned elsewhere (back in INVESTING maybe?) that anyone can call
him/herself a financial planner.  You really should consult with a *certified*
financial planner.  The certification is from the International Board of 
Certified Financial Planners (IBCFP), a self-regulating body (sort of like NASD)
which provides the public with standards of professional competence as well as a
tribunal for considering violations of the public trust.  There are education,
examination, experience, and ethics requirements which must be met before the
certified designation is granted.  The code of ethics requires full disclosure
of background, employment experience, and compensation.  The IBCFP is very
interested in hearing if you suspect your certified financial planner has
breached his/her fiduciary responsibility.

The bottom line with any of this stuff is be careful.  It is your money.  Always
raise an eyebrow, but don't necessarily ask "What's in it for him?", but rather
ask "Is this advice/product right for me?".

- Chris

>      It's been mentioned elsewhere (back in INVESTING maybe?)  that
>      anyone can call him/herself a financial planner. You really should
>      consult with a *certified* financial planner. The certification is
>      from the International Board of Certified Financial Planners
>      (IBCFP), a self-regulating body (sort of like NASD) which provides
>      the public with standards of professional competence as well as a
>      tribunal for considering violations of the public trust. There are
>      education, examination, experience, and ethics requirements which
>      must be met before the certified designation is granted.  The code
>      of ethics requires full disclosure of background, employment
>      experience, and compensation.  The IBCFP is very interested in
>      hearing if you suspect your certified financial planner has
>      breached his/her fiduciary responsibility.

      
      I've  never  heard  of  the IBCFP and I have no idea what, if any,
      value their certification carries, so far as you/I, the "customer"
      is concerned.
      
      There   are   "professional   associations"  and  then  there  are
      "professional associations".  The better ones do a reasonable  job
      of  regulating themselves for their members benefit.  e.g. The AMA
      and the Bar Association  are  of  great  benefit  to  doctors  and
      lawyers  respectively.   Their  value  to  patients and clients is
      somewhat more suspect -- probably better than nothing,  but  could
      be better.
      
      Then  there is the association that awards the "CLU" or "Certified
      Life Underwriter" title to insurance agents.  It may have  changed
      it  the  more  than  a  decade  since  I  tried my hand at selling
      insurance, but back then this was not much more than a recognition
      that an agent had lasted a minimum number of years in the business
      and it was time to  welcome  him  to  the  club.   Don't  ever  be
      impressed with the letters "CLU" after a name!
      
      High  sounding words in a charter or "code of ethics" mean nothing
      more or less  than  the  member  make  them.   Until  demonstrated
      otherwise  to  me  I  would consider that a certification from the
      IBCFP is an empty honorific, full of sound and  furry,  signifying
      nothing.

      Please  note  that  I  DO  agree  with the underlying idea here --
      namely that you should check the credentials of someone who  might
      become  your  "financial  planner".   IBCFP  certification  is one
      credential.  I'd give more weight to the  opinion  of  financially
      knowledgeable people.

.20>And this is the financial planners fault?

Absolutely yes.  Anybody who claims to be a financial planner should never
recommend a product which is obviously wrong for the customer.  An insurance 
salesperson, on the other hand, is just doing a job.

The fact that this customer was negligent at best may change the legal 
situation, but does not change the ethical situation.

.20> If a client or planner is too
>    eager or doesn't ask enough questions and get satisfactory answers, I can
>    believe the above situation would result.

You had better believe it.  INVESTING was full of stories about people with
similar situations.  The financial news is also full of them.  This is no 
mere theoretical possibility.

.20> The bottom line with any of this stuff is be careful.  It is your money.  Always
>    raise an eyebrow, but don't necessarily ask "What's in it for him?", but rather
>    ask "Is this advice/product right for me?".

I sense a consensus emerging here.  Behind some of the intemperate language, I
think you will find the same question: "Is this advice/product right for me?"
in many of the other replies.

But note that only a fairly knowledgable customer can answer this question.  So
whether I use a financial planner or not, I cannot avoid learning some 
elementary concepts of financial planning.

.8> I'm happy for you that you can design and execute a flawless financial plan for
>   yourself and your family.  I also feel terrible for those who can't.

This and the rest of .8 make it sound like family finance is as hard to learn 
as brain surgery.  This ain't rocket science!  There are a dozen good books
(and a hundred bad ones) which could tell the average person all they need to
know about it.  There were several notes in INVESTING on "Advice for the Novice
Investor" which boiled it all down into a page or two.

.22> .8> I'm happy for you that you can design and execute a flawless financial plan for
> >   yourself and your family.  I also feel terrible for those who can't.
>
> This and the rest of .8 make it sound like family finance is as hard to learn 
> as brain surgery.  This ain't rocket science!  There are a dozen good books
> (and a hundred bad ones) which could tell the average person all they need to
> know about it.  There were several notes in INVESTING on "Advice for the Novice
> Investor" which boiled it all down into a page or two.

    Right on.  It always struck me as a bit odd that our school system does
    not see fit to give students even a bit of an overview of "what to do with
    the money you've earned".  This despite the fact that in the USA, and I
    suspect elsewhere, we send people to school for 12 to 16 years or more
    with the primary objective of educating them how to EARN a living.
    (I'm resisting here the temptation to bash teachers and the school system).
    
    Nevertheless, there is no black magic involved.  Some time spent
    learning the topics will reward you far more than a self-serving
    "financial planner".
    
      John

    
    Can anyone recover those 1-page summaries from INVESTING?

re: 39.8

      I  held off on replying to this entry because, frankly, I found it
      a bit offensive.  I know that there is a potential in my reply (or
      ANY  reply!)   to  also  be  offensive.   I'll try not to give any
      offense, and, if I don't fully succeed, please DON'T take offense.

>I fail to understand why you noters have such a snobby attitude and bash
>financial planners as much as you do.
      
      Is  it  just  possible that if you abandoned the belief that these
      replies show "a snobby attitude" then you might be better able  to
      so  the point that is being made?  To encourage your doing so, let
      me point out that these are more than "IMHO's" and "my 2�'s".  They
      are  considered  opinions  of  people  who, by and large, are above
      average in their understanding of financial affairs.

>Comments like "FP's are out there to sell you something, whether or not you need
>it", and "FP's are only concerned with making money for themselves" are just
>plain stupid.
      
      They most certainly are not stupid; they are ENTIRELY CORRECT.  
      
      Every  sane  person  in  the world is concerned first and foremost
      with not starving to death�.   In  a  money  based  economy,  this
      translated into making money for themselves.  Financial planners,
      good, bad or indifferent, do this  by  selling  you  something  --
      either  their  advice,  in  the  case  of  fee-based  FPs,  or the
      product(s) they represent, in the case of commission-based FPs.
      
      Thats  the  way  the  world  is.  The whole world, not just FPs or
      financial markets, the WHOLE world.  You get NO choice on this.

>A financial planner is no different from ...
      
      As  several replies have pointed out, there are a great many, very
      significant differences between financial planners and the various
      other classifications of people you point out.
      
>...you are in fact telling people to stay away from [a financial planner]
>...that might actually answer their questions and solve their problems...
      
      There  are certainly instances of specific financial planners that
      it has been suggested you stay away from.  However, I haven't read
      any  advice  that  I take as an ABSOLUTE warning to stay away from
      all of them.  What I have read falls into two categories:
      
          1)  Making the very true point that at least most and probably
          all financial planners have some conflict of interest  to  deal
          with  in serving the client.  That isn't bad in all cases, but
          it is something that every potential client needs to take into
          account in weighing advice received.
          
          2)  Making  another  very  true point that much or most of the
          advice that can be had from financial  planners  is  available
          for  free  in  books  and  periodicals aimed at every level of
          investor. I think that most people would agree that it is good
          financial advice NOT to pay for what is available free.
      
>I'm happy for you that you can design and execute a flawless financial plan for
>yourself and your family. 
      
      Happy?  HAPPY! I'd be ecstatic beyond belief if I could do this. I
      can't.  Neither can any  of  the  other  readers/writers  in  this
      conference.   My  best  hope  is that by sharing advice we'll all,
      including you, do better planing than we could manager on our own.

      ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
      �Yes, I admit you could nit-pick this to death with all  sorts  of
      religious  and  moral  codes that place certain values above self.
      Please don't because (1)  it  beside  the  point  and  (2)  almost
      everyone drops such values very quickly when faced with starvation.

    Through my readings, I've come across many negative comments on
    financial planners and maybe one good one.  
    
    There's a book by Jane Bryant Quinn (Making the Most of Your Money)
    that's fairly well regarded and provides good information on financial
    planning.  It sounds like she read the notes file and quoted it.
    From page 826:

       "Don't go near a planner if you've just come into a lot of money and
    	don't know what to do with it.  Clients with loose cash and weak
    	convictions are fresh meat, ready for roasting.  A self-interested
    	planner may urge you to buy high-commission investments that serve his
    	or her objectives better than yours ...

    	Learn the basics...  The only expert safe to visit is a certified
    	public accountant who doesn't sell financial products.

    	... Most planners have to sell or starve"

    Gim

    
    

    
    
    	With all the talk/activities about TFSOs & Early Retirement, etc.
    
    	Where is the best place to park your money while learning?
    
    	

   The best "parking place" is usually a Money Market Mutual Fund. They pay 
the current market interest rates (low right now) with a very high degree of
safety and liquidity.  As with ANY investment though, read the prospectus so
you understand any restrictions before you put any money into a fund.

   Some of the common restrictions are:  
Limit on the number of checks that can be written per month.
Minimun amount a check can be written for.
Minimum time between deposit and withdraw.

   Do NOT put money into a fund that charges a load or sales fee.

Brian Hibbert

	Hope this isn't beating a dead horse, but I just saw this note
& just had to ask:

	If client knowledge is so key to a successful plan, &
therefore lets the FP off the hook, do FP's make sure they inform
their clients of that, and offer advice on books to read, etc?  I think
that some (many?) folks, particularly the older generation, put their 
complete trust in a planner to have all the knowledge (knowledge, yes,
your interest, no way, but that's unclear for some naive & trusting souls).
The very reason clients seek help is that they don't want to have to do
all sorts of research, etc!

	If FP's know that, the ethical thing to do would be to dismiss a
client until the planner is sure the customer understand the recommendations 
that are being given.  Has anyone ever seen that happen !?  I'd bet its
very rare--and thus the perception that they take advantage of vulnerable
people.

    
    As .24 asked,  can the summaries be added?   Or any idea where
    they are now, meaning what note.  I can extract as fast as any-
    one else, but a dir/search seems to take hours.
    
    Thanks.
           
    -Rick.