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Byline: Deborah Adamson Daily News Staff Writer

When Dr. Jeffrey Luttrull of Ventura goes about his day treating patients for retinal problems, he can rest assured his money is working for him as hard as he is at earning it.

Thanks to his financial planner, the surgeon says he is confident he will have enough money set aside for retirement and other financial goals.

``He's saved me more money and made me more money than he'll ever cost me,'' Luttrull said. ``He's someone I can trust, who works to benefit me.''

It's no accident that he picked a good adviser: Luttrull got a referral from his accountant, someone he trusted. The doctor met and felt comfortable with the financial planner, who has a history of success stories.

``Choose someone with a proven track record and known by people you trust,'' said Luttrull, adding, ``I don't do business with strangers over the phone.''

Indeed, good financial planners are worth their weight in gold.

But finding one needs careful research. It's time well-spent, financial experts say. After all, they argue, you spend 40 hours a week earning money and you might as well use a few hours finding someone to make it grow.

Who needs a planner? If your situation does not have complicated tax issues, for example, then you might not want one. But many people seek advisers because they don't know how to plan for their futures or don't have the time to do it.

A financial planner offers financial advice for compensation. A planner may or may not sell insurance or investment products like mutual funds as well.

With a good financial planner, consumer groups say, you should be able to save on taxes, achieve a competitive rate of return on your investments and sock away enough money for the future such as your children's college tuition and retirement income.

But first, you need to separate good advisers from the bad or mediocre.

Anyone can hang out a shingle and call themselves a ``financial planner,'' said Barbara Roper, director of investor protection at the Consumer Federation of America in Washington, D.C.

She said that certain people from a variety of professions - for example, insurance and mutual fund salespersons, stockbrokers, accountants, attorneys and bankers - may also call themselves financial planners.

But instead of offering comprehensive financial advice that covers all aspects of your life - such as cash flow management, retirement and estate planning - they sell you investment products, typically for a commission.

Without the expertise to evaluate your entire financial situation, Roper said, they won't necessarily know the best investment or course of action for you to take.

If they receive a commission on the products they sell you, she said, then they could be tempted to offer something that benefits them more than it does you.

For example, they might push a higher-risk investment product such as real estate limited partnerships even if a client says he wants to lower his risk.

In general, the greater the risk, the higher the commissions, Roper said.

These people probably will have a license to sell securities, such as stocks and bonds, but that alone does not qualify them to be good financial planners, consumer groups say.

Start with professionals who have these designations: Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC) or a Personal Financial Specialist (PFS).

While titles don't guarantee performance, at least it shows the holder took courses and passed exams. They also are required to continue taking classes to keep up with trends.

The best planners take the time to get these designations, said Phyllis Bonfield, spokeswoman for the American Society of Chartered Life Underwriters and Chartered Financial Consultants.

CFPs tend to be generalists, while ChFCs have a leaning toward insurance expertise. PFS holders also are Certified Public Accountants or CPAs.

You want someone with plenty of financial planning experience and with whom you feel comfortable, said David Bergmann, a certified financial planner in Marina del Rey.

To find a good adviser, get referrals from trusted friends, preferably in similar situations as yourself, said Mark La Vine, president of Professional Planning Corp. in Woodland Hills.

Interview a handful of their recommendations. Many planners offer free 30-minute to one-hour consultations.

``If they won't answer questions, then stand up and walk away,'' said Robert Detterman, a certified financial planner for Bo-Gin Financial in Westlake Village.

Once you sit down with a planner, ask him if he is registered with the federal Securities and Exchange Commission, and the state Department of Corporations, as an investment adviser. If not, it's your cue to leave.

If he is registered, ask to see Form ADV, Parts 1 and 2, which will give you the planner's personal and educational background as well as disclose any disciplinary actions taken against him.

You also can check him out by calling the Securities and Exchange Commission at (213) 965-3849 and with the state at (213) 736-2502. In addition, you can contact the Certified Financial Planner Board of Standards to investigate any CFP, at 1-888-CFP-MARK (toll-free).

Find out how the planner is compensated - fee only, commission only or commission and fees. By law, they are obliged to disclose this information.

In general, fee-only planners are more objective, Roper said. Since they do not benefit from pushing you into a certain investment, they tend to give you advice that is best for you.

``You can't generalize that commissioned planners won't look out for your best interest, but fee-only planners have a better leg to stand on'' in claiming to work solely for the good of the client, said Mike Wilson, spokesman for the College for Financial Planning in Denver.

Fee-only planners may charge a flat fee or retainer, an hourly fee, a percentage of assets, a project fee, or a percentage of income.

Be careful to distinguish between fee-only and fee-based or fee-offset planners. Fee-based and fee-offset actually means the planner is paid through both commission and fees, according to the National Association of Personal Financial Advisors, a fee-only professional group in Buffalo Grove, Ill.

Ask advisers how they would prepare your financial plan, consumer groups said.

Good planners will give you an analysis of your financial situation.

They will define your goals, create a plan to consider all financial aspects of your objectives, help you implement recommendations and periodically review and adjust the plan to account for changes in your life, taxation and others.

Don't forget to ask for risks and liabilities involved, according to the American Society of CLU and ChFC.

Be wary if he resists bringing in other experts to help, Roper said. No professional knows it all and a good planner won't hesitate to refer you to a network of other experts in related fields such as accounting and law.

``If you think you're getting someone who knows everything, then you're in bad shape,'' Luttrull said. ``No one knows everything.''

Roper does not recommend that you give your financial planner the ability to withdraw from your account. Many cases of fraud have occurred when clients hand over this responsibility, she said.

But if it's more convenient for you that a planner execute your transactions, be sure that he's bonded so your money is insured against fraud.

Next, ask for references from current and former clients, consumer groups say. A good planner will have nothing to hide and will have kept most of his customers, said Jim Schwartz, the Denver-based author of ``Enough: A Handbook For Your Personal Financial Planning.''

Ask the planner's current clients how they would rate the progress toward their financial goals, comparing the status at the start of the plan with their present situation, Schwartz said.

There should be a marked improvement. For example, a Crating before the planner went to work on their goals should show movement to B or A.

Ratings are a better gauge of satisfaction than simply asking a client if he is satisfied with his planner, Schwartz contends. Some people don't want to be openly critical for fear of legal retribution.

Be sure to ask former clients why they left their planner, he said.

According to the National Association of Securities Dealers in Washington, good reasons to dump an adviser include the promise of spectacular profit, such as ``your money will double in six months,'' guarantees that you won't lose money on an investment and a high level of transactions in your account that generates more commissions for your adviser but has no clear benefit to you.

``We strongly recommend that people take the time to educate themselves. . . . about personal finance so they can tell bad advice when they hear it,'' Roper said.

``You shouldn't walk in and just hand your money to someone. You could be a victim of fraud or incompetence,'' she said.

Seniors are more vulnerable because their life savings are involved, she said.



Drawing: No caption (Color--Choosing financial planner Aor B)

Bradford Mar/Daily News
COPYRIGHT 1996 Daily News
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:BUSINESS
Publication:Daily News (Los Angeles, CA)
Date:Jun 16, 1996

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