you to carry out on your own. Others will facilitate your carrying it out, but will not take a commission. They use products with no load. Some of them will monitor these plans on an ongoing basis for a retainer or on an hourly basis. There are some planners who make their living by receiving a commission. Therefore all the up front time and energy and the plan they prepare for you have not been paid for. But they expect that once you begin investing that will generate a commission. The third type of planner is one that combines the two, which is what I do. I can charge a fee from $500 to $2,000 and I can carry out that plan. In the process there may be investments that pay a commission, but I am no longer biased or forced to recommend an investment with a load. CUE; Investing is more fun than insurance, but financial planning does address insurance. KENDZIORSKI: You have to manage your risk. There is a risk that you may die and your family depends on your income. The chances are low, but possible. For an inexpensive price you can manage that risk, i.e., term insurance [the cost increases as the insured ages]. Now if you cannot save and yet you are committed to papng your bills, then maybe a universal life or variable life [combines life insurance and savings] is a better investment because it is a forced savings program. Disability income is the same thing. Who would be hurt if you were disabled and to what degree would they be hurt? What happens to you, your mortgage, emergency fund or other investments? I approach it on every level. What would happen if your health turned bad? I want people to think about if they are adequately covered, make a conscious decision, and then tell me, "Tm not going to do that but I thought about it." If that's the case, fine, it's your decision and your life. I'm not going to force the issue, but I don't want people to make a decision by default. CUE: Consumer Reports did a cover story on financial planning with the subtitle: "What are they really selling?" Brokers sell stocks, insurance companies sell insurance, but they all call it financial planning. KENDZIORSKI: What is the approach you take to financial planning? If someone has an insurance background and says these are the investments I use and they are all insurance products, then you know your planner is quite parochial and would have a limited outlook. You want someone who deals with all types of investment options. Ask the person: "What is your bias?" or "What is the typical portfolio for someone in my situation?" The title of financial planner is abused. The International Association of Financial Planners and others are trying to address that problem. I always say to people, "It's your money. You're responsible. You're going to have to make decisions. You are just asking for someone to help you make those decisions." CUE: In talking with a planner is there a way to find out how much they know about SRI? KENDZIORSKI: That's a good question. A lot of people say they are interested in SRI, but what do they do in regard to it? My first question is what types of investments do they tell their clients about? Are we talking about just the Calvert Money Market or Managed Growth Fund or about the whole array of options? Second question: Do they deal with individual stocks and have information about their social responsibility? Question three is more global: What types of tools and approaches do you take to help me define what is important to me in terms of ethical investing? The answers will give you a sense of their approach. I have seen a major problem with people who say they are interested in SM but don't have access to resources. I've been flabbergasted by some people who say they are doing SRI. It is very much a speciality. On top of reading everything else, they have to read the material on SRI. You may be better off getting a referral and talking to some of their clients for a recommendation, ll Kathleen Kendziorski Page 13
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