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Financial Planners Try Giving Out Free Advice

Times Staff Writer

Consumer credit is at an all-time high; personal savings is at an all-time low. Stock, bond and real estate markets all look volatile and dicey. Meanwhile, new and increasingly complex financial products are being created at a rapid clip.

There’s no question that consumers could use professional help to make sense of it all, but only a tiny fraction of Americans seek assistance from financial planners.

Sarah Ball Teslik thinks she knows why.

She is chief executive of the Certified Financial Planner Board of Standards in Denver -- an organization that certifies planners. Her group has been studying the factors that encourage people to seek financial advice from their co-workers and distant relatives instead of a professional advisor.

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“Some are embarrassed,” she said. “They don’t want to come in and say that they have credit-card debt.”

Others are simply befuddled, she said, feeling incapable of even asking the right questions. They assume Uncle Fred will be more tolerant of ignorant queries -- and won’t bill by the hour.

Some are blinded by misperceptions, such as believing that financial planning is only for the wealthy. And many are cynical of those providing advice because a lot of financial planners have products to sell that might taint their suggestions.

On Friday the Certified Financial Planner Board of Standards will conduct an experiment to see whether they can break down those barriers.

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The board will bring together more than 100 financial planners at the Los Angeles Convention Center to provide a full day of free, one-on-one financial advice for anyone who wants to attend.

“There are no strings attached, but no one believes it,” Teslik said. “We have sessions on financing college, getting started when you first go out on your own, handling financial issues for a small businesses, personal finance for Latinos -- and we’ve got the world’s leading expert on mutual funds talking about how to decode them.”

There will be room for thousands of people to attend. At last count, only about 500 had preregistered.

The planner board is spending $2 million of its $15-million annual budget to sponsor the conference and bring in dozens of speakers, including Queen Noor of Jordan, former U.S. Sen. Bob Kerrey (D-Neb.) and Pfizer Inc. Chief Executive Hank McKinnell.

“We would have no problem, if we were giving away beer,” she said. “But, nobody believes we have nothing to sell.”

Teslik’s organization is a nonprofit that exists to establish and enforce basic standards of ethics and competence in the financial planning industry.

The group does not give referrals. But it can tell you whether a planner is certified. That means the advisor is keeping up with continuing education requirements and following ethics guidelines. To find out, you can go to the organization’s website at www.cfpboard.org and look up the planner by last name and state.

The site can also tell you whether the planner has a disciplinary history and, if so, what it was about.

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The Los Angeles financial planning clinic is a test to determine whether similar programs should be conducted nationwide, Teslik said. Millions of dollars are spent every year on financial literacy efforts, and most of that money is wasted, she said.

“There is all of this literature out there. Some of it is too technical, some is too preachy, some is motivational but doesn’t put anyone in a position to do anything about it,” she said. “This is an experiment to see if in-person and free advice has got an appeal or not.”

The day’s events will fall into two parts. The morning is informal. The group plans to have hundreds of financial planners available to answer questions, one on one. Anyone with a specific concern about a 401(k), retirement planning, paying off credit cards, dealing with estate taxes, budgeting, or finding ways to reduce income taxes can sit down with a planner.

“We’ve got a couple hundred volunteers, sitting at tables,” Teslik said. “People can walk up, and ask any question, get the answer and walk away. They don’t even have to give their name.”

Planners will not be making recommendations on individual stocks or touting insurance or mutual funds. The volunteers are prohibited from trying to sell or market any service during the event.

“We are not even letting participants give out their business cards,” she said. “If the consumer wants to get a list of participants later, they can. But, they’d have to come to us. There is no selling here.”

The afternoon will consist of a series of break-out sessions. Some are inside-baseball with planners speaking to planners. Others are geared to the public, providing primers on mortgage loans, mutual funds, budgeting and investing basics.

There’s only one session that costs money: It’s a lunch presentation by Pfizer’s McKinnell. There will be a charge of $15 to defray the cost of the meal.

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Otherwise, the only cost to attendees is their time. How much time to devote to the event is up to each attendee. They can stay the day, or go in for just one session -- or one question, Teslik said.

However, those who want to attend a specific break-out session would be wise to preregister. That’s because each session is expected to have room for just 150 participants. Those who have preregistered are guaranteed seats in the sessions they’ve reserved.

To register, go to www.cfpboard.org. Click on the “free financial planning clinic” button at the top of the screen.

But walk-ins are also welcome.

“There are no strings attached,” Teslik said. “Just show up.”

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Kathy M. Kristof, author of “Investing 101" and “Taming the Tuition Tiger,” welcomes your comments and suggestions but regrets that she cannot respond individually to letters or phone calls. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail kathy.kristof @latimes.com. For previous columns, visit latimes.com/kristof.


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