From: lincoln@think.com (Lincoln Marta)
Newsgroups: misc.invest
Subject: Financial Planning
Date: 28 Aug 1992 10:30:25 -0400
Organization: Thinking Machines Corporation

                    FINANCIAL PLANNING ?


Here is the what I asked ?

>I would like to ask about mutual fund investment recommendations
>I am interested in putting together some sort of investment
>portfolio.  Yesterday, I spoke with someone from IDS, who called
>himself a financial planer.  The meeting was quite informative
>and his deal sounded very promising.  His price was $350 for 
>doing a financial analysis.  Then later he would put together
>a package of equity, bonds, and funds "to help me achieve my
>financial goals". After resisting this pitch and reading through
>the information he left behind, I found out that this planner 
>makes his money via commisions, and would probably recommend a
>plan to me which would include buying some investments, which
>would result in paying him commissions.  
>
>I am intereseted in no load mutual fund investing. I have limited
>investment knowledge and would like to know if their is a 
>particular newsgroup who should receive these requests.
>
>Also has anyone had experience with a financial planner?  What advice
>does the net have to offer?

Here is what I got--->
*Please note that I have left out names where possible (unless someone
*seemingly didn't mind), because I'm not sure if people wanted their
*responses posted.

RESPONSE 1:
----------
In article <9208251722> you write:
>I would like to ask about mutual fund investment recommendations
>I am interested in putting together some sort of investment
>portfolio.  Yesterday, I spoke with someone from IDS, who called
>himself a financial planer.  The meeting was quite informative
>and his deal sounded very promising.  His price was $350 for 
>doing a financial analysis.  

Good deal, I think I paid $500.

>			      Then later he would put together
>a package of equity, bonds, and funds "to help me achieve my
>financial goals". After resisting this pitch and reading through
>the information he left behind, I found out that this planner 
>makes his money via commisions, and would probably recommend a
>plan to me which would include buying some investments, which
>would result in paying him commissions.  

That's true.  Of course, you're not obligated to purchase what he
recommends.  In my case, his recommendations included a particular IDS
mutual fund.  I've been a Fidelity investor for a while, and I knew of a
similar Fidelity fund with a lower load.  He didn't hassle me when I
decided to invest there instead.

>I am intereseted in no load mutual fund investing. I have limited
>investment knowledge and would like to know if their is a 
>particular newsgroup who should receive these requests.

misc.invest.

Magazines such as Money and Forbes annually publish lists of mutual funds
with historical information and ratings.  That's how I got started.

>Also has anyone had experience with a financial planner?  What advice
>does the net have to offer?

I was pretty satisfied with my work with the IDS financial planner.  I've
been investing in common stocks and mutual funds for about 8 years, and he
helped me diversify into other forms of investments.  I've now got shares
of a number of limited partnerships, one of which provides tax credits, the
others providing potential returns larger than stocks generally do (I moved
my IRA money there).

RESPONSE 2:
-----------
I had an ongoing dialogue with IDS, and shied away for precisely the
reason you mention.

I suggest you pick up "The Only Other Investment Guide You'll Ever
Need" by Andrew Tobias (readily available in vanilla bookstores) and do
a little homework. It's easy to read, you might find it interesting, it
provides you with some idea of what you need to do, and most
importantly it gives you an idea of all the things you do *not* need to
do.

	Good luck,

RESPONSE 3:
----------
Well, the newsgroup is misc.invest, and sometimes, misc.taxes.  Your
best bet is to get a hold of the FAQ; it has reasonable explanations
of mutual funds (no-loads, money market, etc), bonds, stocks, etc.
It'll give you a start.

RESPONSE 4:
----------- 
> I would like to ask about mutual fund investment recommendations
> I am interested in putting together some sort of investment
> portfolio.  Yesterday, I spoke with someone from IDS, who called
> himself a financial planer.  The meeting was quite informative
> and his deal sounded very promising.  His price was $350 for 
> doing a financial analysis.  Then later he would put together
> a package of equity, bonds, and funds "to help me achieve my
> financial goals". After resisting this pitch and reading through
> the information he left behind, I found out that this planner 
> makes his money via commisions, and would probably recommend a
> plan to me which would include buying some investments, which
> would result in paying him commissions.  
Doesn't it make you wonder why he gets $350 plus the commissions?

I am a representative for Primerica Financial Services. We offer
advice and information on insurance, investing, and equity lines
of credit.  The information is free - free consultation etc - the
only money we make is the commissions off of the products you end 
up utilizing.  If you utilize none, we make zip.  We also hire
people to do the same.  If you're interested in learning all you
can about mutual funds etc., I would suggest you join us.  If you're
able to spend a few saturday mornings learning this fall, our office
also offers a four session financial seminar.  This is NOT free -
It'll cost you $25, and is well worth the investment.  The office
is in Salem NH, right off exit 2 on 93.
Office phone is (603)890-6193.  Talk to Cliff or Dick, and tell
them Mary Watts sent you!
> 
> I am intereseted in no load mutual fund investing. I have limited
> investment knowledge and would like to know if their is a 
> particular newsgroup who should receive these requests.
> 
> 
> 
Don't know of any no-load funds that are REALLY great.  They are all
a bit of a gamble, and as such, our company tends to shun them.  You see,
the load of the fund not only pays a portion as commission to the 
advisor, but also to the management of the fund.  If you'd like an
explanation of how loads work, etc., let me know.

My email address etc is below.  I'd be happy to come talk to you and
show you our company's offerings.  I'm not a high pressure salesperson
(actually, I'm a full time mom, part time financial advisor!), but I 
do have information that can help you make the decisions you're heading
into, and I don't charge $350!

-- 
mary watts
=====================================================================
 CompuServe: >INTERNET:uunet.UU.NET!ki.com!mary  Mary Watts        
 UUCP      : ...!uunet!ki.com!mary                
 FAX       : 603 432 9987                        15 Al Street      
 Voice     : 603 437-6617                        Derry NH   03038  
############## A mind is a terrible thing to waste  #################

RESPONSE 5:
-----------
First:  IDS is a respectable financial planning firm, so at least you're not
being ripped off by a fly-by-nighter.  The fee+commission structure is fairly
common, but there are alternatives.

On the net:  There's a newsgroup called misc.invest which talks about these
things.  It's generally pretty understandable, with low flaming.

No-load funds: Since you're in the area, I might suggest that you go to the
office of one of the large fund families headquartered in Boston.  Fidelity and
Dreyfus both have large no-load families of funds, and Scudder has lots and
lots of fixed-income (i.e., bonds, rather than stocks) funds that are quite
well thought of.  They also have on-staff planners who, while they won't do a
comprehensive financial plan, can point you in the right direction for free.

Planners:  Charles Schwab publishes (and gives out for free, as I recall) a
pamphlet called "How to Choose a Financial Planner."  Required reading.  Lists
lots of certified financial planners who are "fee-only"; that is, pay 'em once
and then no commissions after that.  

My personal preference:  I use a smaller mutual fund group called 20th Century,
headquartered in Kansas City.  They specialize in growth stocks, but they have
bond and money-market funds as well.  The expenses for 20th Century are the
lowest in the business, and they're friendly, but they're a strictly
do-it-yourself place: no advice or planning.

My recommendation?  Get the Schwab guide, then go talk to Fidelity or Dreyfus. 
Decide whether you need a financial planner at all once you've heard the free
advice that the big mutual fund families can offer.

My credentials?  Well, I'm not a certified financial planner, but I do invest a
lot and I plan to teach at a business school.

Hope this helps.  The big thing to remembers is: DON'T RUSH.  You have plenty
of time to set up whatever plan you want; do some shopping around.


RESPONSE 6:
-----------
Hi.  We had one of those financial analysis done by IDS.  It is probably
useful if you've never done any overall analysis of your income, your
investments, insurance needs, etc. etc.  We had actually had some
estate planning done by our lawyer so we found a lot of duplication
in advice (but for whatever it's worth, the IDS advice was pretty 
consistent with the lawyer's).
To be fair to them, they do not just recommend the stuff they
sell in the analysis but cover overall insurance needs, overall 
retirement planning, etc (at least the IDS planner that we used).
Yes, they do recommend IDS investments where possible, although we
did not find them excessively push.  Some IDS funds are rated highly,
as far as ratings are worth, but you will need to do comparison shopping
yourself.  Money magazine just had an issue that rated various funds
(one section talks specifically about costs, I think).

I also have an IRA fund managed by an independent investment person (to
be invested in individual stocks when the prices come down).  I know 
this person personally & trust his integrity.  He charges me commission
separately; he says that there is always a commission for managing
investments, & paying them separately is better.  For one thing,
all the profits of my IRA fund can be reinvested tax-free while I
pay commission separately.  Another thing is that your "cost" is
clearly defined.

RESPONSE 7:
-----------
   Also has anyone had experience with a financial planner?  

I had good experience with Sharon Rich (she's in Belmont, or I can
look for her number in my files if you'd like).  She charges $60/hour
(I think) and doesn't get commissions.  She really won't recommend
that you choose fund A over B, but she'll do a good job of comparing
different investment vehicles for you if that's what you really want.

I recommend you buy a copy of Money magazine and call up a bunch of
no-load fund groups and ask for a bunch of prospecti.  You'll learn a
lot just by reading them, which you're supposed to do before you
invest, anyways.

	What advice does the net have to offer?

You can always read misc.invest :-).
********************************************************************
Thanks for your advice,

Lincoln





Newsgroups: misc.invest