Seeking an investment advisor.

The Jacksons knew they needed help with their wealth-building strategy -- here's how they finally found the right financial planner 

Talk about a change of heart. Not so long ago, Dawn and Scott Jackson wondered what good could ever come of seeking help with their finances: it was a waste of time. In fact, the Jacksons felt that a financial planner would only bully, patronize and even lead them astray. Rather than deal with the hassle, it was better to lump their savings in a bank account paying 2.75%.

Today, the Jacksons of Bowie, Maryland, puzzle over just how they managed without someone to guide the way. Better yet, the couple can look back at a bull market and know that they took advantage of an opportunity to build wealth and stability.

So what exactly made the difference?

In each instance, the Jacksons say their understanding or confusion, their satisfaction or bewilderment, hinged on two experiences. Four years ago, they sat down with a financial planner, and in the course of a few weeks became so alienated that they swore they'd never do it again.

In less than a year, they met with another planner, Albert Peltier, and were converted. But that's jumping ahead of the story a bit.

BE met with the Jacksons and Peltier to trace how they established a trusting relationship. With recent surveys showing African Americans woefully underinvested and even a bit intimidated by the stock market, we wanted to see just how working with a financial planner can be rewarding. We also wanted to get a sense of what you can do -- and should avoid -- once you decide to hire a financial planner. Along the way, we'll detour to help you better understand how financial planning works as a business, but more importantly as a tool, for you and your family.

WHATS IT ALL ABOUT?

If there's a profession that's hard to get a handle on, it's financial planning. Start with the myriad of job tides. There are stockbrokers, financial planners and financial advisors all vying to leap hands-first into your wallet.

Then, there's certification. Lawyers have to pass the bar to practice; doctors must be certified by the American Medical Association and state regulators. But until a few years ago, there were no set degrees, no standard affiliations for financial planners. Today the closest thing to a seal of approval is the certified Financial Planner (CFP) designation, held by over 33,000 advisor's nationwide. Issued by the CFP Board of Standards (888-237-6275) in Denver, the CFP designation requires that planners pass rigorous testing and follow up on changes in the industry by attending seminars. Stiff, that's not the only professional group or affiliation around: there are others, each with its own roster of professionals. The International Association for Financial Planning (IAFP, 800-945-4237), and the National Association of Personal Financial Advisors (NAPFA, 847-537-7722) are two groups that can also supply you with names of members in your area.

If you still want some sort of assurance that the person you're entrusting with your riches isn't a fluke, we don't blame you. One way to get a better sense of a prospective planner's background is to thoroughly grill him or her on credentials and professional affiliations. Remember, too, that most planners must file a Form ADV with federal regulators. The ADV is of utmost importance to you. It's documentation that outlines how many years the planner has been working, fees that he or she charges, and whether any disciplinary actions have been taken against the planner. Beware: the ADV comes in two parts; planners are required to show you only one part, but ask to see the entire document to be absolutely sure you know as much as you can about the person you're dealing with.

There are other checkpoints as well. Your local Better Business Bureau is always good, as well as your state's securities and insurance regulators. Check the Securities and Exchange Commission in Washington, D.C. (www.sec. gov, 202-942-4320) to see if your planner has ever run afoul of federal rules. And, if your planner is also a stockbroker, you should check the National Association of Securities Dealers (NASD) (www.nasdr. com, 800-289-9999) to see if there have been any judgments or disciplinary actions taken against your advisor.

As hard as fathoming titles can be, it's also difficult to get a handle the on just what financial planners do, if only because there are so many facets to our financial lives these days. We're asked to balance the purchase of a home, retirement savings, college tuition for our kids, in addition to a budget for cars, food, clothing and furniture. What's more, the financial services industry can seem like a Hydra, the mythical nine-headed snake slain by Hercules. There are growth, aggressive growth, growth and income, load and no-load mutual funds; there's whole-life insurance and term insurance. And, to make things worse, the list doesn't stop there.

Experts say it's best to stick to a simple plan. Have your financial planner listen to your goals and then point out ways for you to attain them. Your planner should map out strategies to follow, the risks involved and the time frame required. Then, should you entrust your finances to a planner, make sure they report to you every time they need to make a move. Put together, these pieces will help you draw up a sound financial blueprint.

SOMEONE TO HELP

It only goes that if you're overwhelmed like most of us are by the myriad choices and decisions we must make, a financial planner can help. That's not to say that choosing one is the easiest thing to do. Take the Jacksons, for instance.

There came a time, a few years back, when Dawn and Scott decided to turn a comer of sorts. College sweethearts, the two had stuck together since meeting freshman year at Hampton University. They'd gotten married, and hit the working world in tandem, too. There were good times and they honeymooned and kicked up a little sand in the Caribbean. Now, however, Dawn, 29, and Scott, 30, felt the time had come to start a family. But before rushing headlong into parenthood, they felt there were obligations they had to somehow meet. The question was, just what were they, and what steps would they have to take?

In talking to friends and mulling over their future, the Jacksons concluded that they needed help from someone who could juggle their finances and dreams, someone who could make order of a world crammed with stocks, mutual funds, bonds, insurance, mortgages and refinancings. It's not that they felt they couldn't understand it all: Scott, after all, is an electrical engineer by training, someone who has no fear of calculators, equations and coefficients. Dawn's no slouch when it comes to finance, either. For seven years, she was in charge of contracts for the Navy, a job that demanded that she pour over every figure and spec mentioned in bids for nuclear submarines, ammunition, barracks and uniforms. Even when she left the Navy to work in sides and marketing for BET in Washington, D.C., she stayed on top of the couple's finances.

What they could boast in brainpower, they Lead in time and patience. "We felt we could understand everything, but we just needed someone to stand back, look it all over and make suggestions in plain English," says Dawn. "I'm putting in eight- to 12-hour days at work," says Scott, who helps develop computer networks for the Defense Department, "and when I finally get home, whatever time I've got left goes to the kids."

Which brings up a very important point to bear in mind when dealing with a financial planner: they're working for you, not on you.

The Jacksons found that out the hard way, unfortunately. On a referral from friends, they called a gentlemen, perhaps 45 to 50 years of age. He couldn't visit them at home, but instead suggested that they drop by his office in the posh D.C. suburb of Tysons Corner. They did, and found themselves confronted by an imposing figure in a suit, a man who had but two words to solve all their problems: life insurance. "He wouldn't tell us why, and he said there was no need to explain," Dawn recalls with a frown. "Scott and I left the office, looked at each other and wondered why we ever paid him a call."

The Jacksons nevertheless made a second visit around tax time. "He filled out our returns, and had us receiving so much money back, I was skeptical," Dawn remembers. "And then he capped it all off by telling us that after we got our refund, we'd have enough to get the insurance he was trying to sell us -- that was a turnoff."

TIP ONE:

Come prepared to speak about your goals and have a planner illustrate just what he or she has in mind for you.

No matter how much of an expert your financial planner is, his or her relationship with you boils down to a simple question: what can he or she do for you? "You're hiring someone for the long haul," says Percy Bolion, a certified financial planner in Los Angeles and the former vice president of the Institute of Certified Financial Planners board.

Come prepared to talk about your strategic vision, just what you want to do and when. A good financial planner will then map out how you're going to get there. Another tip, says Bolton, is to listen for ways that the planner is customizing a plan for you, and not just "pushing products" that he or she might use for anyone. And finally, meet with several planners and interview each carefully before you decide.

The Jacksons felt railroaded the first time they worked with a planner; their next experience, however, came about slowly, and in a way, organically. Dawn worked out at a gym after work and got to know Albert Peltier, a certified estate planner and broker with W.M.A. Securities Inc. of Duluth Georgia, who'd just got his financial planning business off the ground. Over a period of months, she peppered him with questions about saving and investing. She took Peltier's answers home to Scott, who then checked on the Internet to see how accurate they were. "We were going to ease into this," says Scott.

They finally worked up the nerve to get together with Peltier, and the planner agreed to come by. In their first meeting -- a five-hour session -- Peltier landed upon their first desire: a home.

"They had quite a bit saved up," recalls Peltier, "and being fairly frugal, they wanted to work down their credit card debt." While that seemed logical, Peltier saw accelerated debt payments as actually blocking their goal. He also noticed that the couple had $20,000 tied up in bank accounts that paid abysmal interest rates. Peltier came up with two items straight off. He advised the couple to open a money market mutual fund account to earn 5% interest. Then, he told Dawn and Scott they'd be better off making minimal payments on their credit cards. That way they were still able to save for the down payment on a home.

After the Jacksons finally secured a new home, and with their first child, Jorre Kiara (now 3) on the way, Peltier sat down with them to talk about finally knocking out their entire credit card debt and making their lives more secure. Their monthly mortgage of $1,400 was well within reach given the couple was earning $95,000 a year; still there remained the question of where the money would come from should some calamity befall either Dawn or Scott.

TIP TWO:

Know what you're being charged. Peltier's solution was variable universal life insurance, or VUL. Peltier says he likes VUL because it combines a term-life insurance policy -- one that covers you for a year or so and must be renewed -- with a mutual fund savings plan. Peltier opened an account for the Jacksons with Western Reserve Life. He also explained his cut, the amount he receives in commissions. Of the $400 the Jacksons put in, 1.2% goes to management fees. Then at the end of the year, Peltier is paid a bonus by Western Reserve, which amounts to about $3,000.

The world of financial planners is divided into two groups, as far as pay is concerned. The first, fee-only planners, make a set percentage off of funds they manage for you, usually in the neighborhood of 1% of your money under management. Other fee-only planners charge a flat annual fee. Fee-only planners make great sense. There paid no matter what, so the logic goes that they're not biased toward any particular type of investment. The problem is, in order to make a living off of fee-only planning, an advisor has to establish an account minimum, very often in the hundreds of thousands of dollars.

Other financial planners opt for commissions. Commissioned planners are paid a percentage of the money they invest for you. That can often take the form of a load or purchase fee on a financial instrument like a mutual fund, which can run anywhere from 1% to 5% of the money you invest.

While Percy Bolton says he's strictly fee-only, he says too much attention is paid to the fee distinction between the two groups of planners. Instead, he advises that you get terms spelled out up front.

TIP THREE:

Have your planner tell you how he or she invests. The Jacksons keep in touch with Peltier, to get regular updates on their money. They step up the number of visits any time they're about to undergo a big financial change. That includes the last few months, when they applied for a consolidation loan to lower their mortgage payments on their second home to about $800 a month. (They now rent out their first home.)

Another case in point: a couple of years ago, when Peltier said it was time for them to get a long-term savings plan under way for their kids. That included investing in the VUL account and deciding which mutual funds to select for a general savings plan.

First, Peltier explained the Rule of 72 to the Jacksons. "He said that you can easily figure out how quickly your savings double when you take the expected annual return and divide it into 72," recalls Dawn.

Peltier used the stock market as an example. Assuming stocks keep to historical patterns and return investors an average of 10% a year, you can assume that your investment will increase 100% in roughly seven years, or the rounded-off answer of 72 divided by 10.

The illustration worked. Dawn and Scott saw the need to get into the market, and decided to put $500 a month tomutual funds. Their choices? The same funds Peltier invests in: Oppenheimer Main Street Income and Growth, Oppenheimer Growth and Oppenheimer International. They also found out that Peltier's firm, W.M.A., would get a 4.75% cut of the Jacksons' investment, of which Peltier would receive 75%.

TIP FOUR:

Check to see how your planner is keeping abreast of changes in the industry. Tax laws, new products and new funds have a way of cropping up in bunches. Financial planner Bolton says no one within his industry can afford to remain in a shell with changes coming quickly and often. His advice: ask how your planner keeps up with the financial industry, and ask what courses, conventions or seminars he or she attends.

Peltier enrolls in a seminar or meeting once every six weeks. He makes sure to stop in on the yearly convention for CFPs and attends quarterly sessions to gather tips from product providers sponsored by his brokerage firm. That's a good thing, too, considering that whenever he's setting up an estate account for Jorre or Dosh Malik, the Jackson's 19-month-old son, he's on top of the latest twists in tax laws and investing.

TIP FIVE:

Read up. Before you head out to look for a financial aide of your own, we'd recommend looking at Smart Questions to Ask Your Financial Advisers, (Bloomberg, $19.95), a book that walks you through just what to expect and how to handle what could be one of your most profitable relationships. Another great guide, Choosing a Financial Planner, is available for free from the institutional money management firm TIAA-CREF (800-842-2733).

After all, working with Peltier was, in some ways, just the beginning for the Jacksons. Scott says he's learned enough to have a budding curiosity about stocks, and has started looking into shares of computer networking companies -- Cisco Systems (NASDAQ: CSCO), for instance -- whose equipment he comes across at work. "When you're on the outside looking in, personal finance can be intimidating," says Dawn. "But, truthfully, a lot of this stuff is easy, once you have the right person to help you through it."