Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, January 23, 1993 TAG: 9301230082
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
LEARNING TO FACE THOSE FINAL CHOICES
THERE'S MORE to estate planning than meets the untutored eye . . .
"When you talk about estate planning," said Janet Briaud, "you have to have a little bit of humor. It helps a whole lot."
Briaud, of Bryan, Tex., is president of the National Association of Personal Financial Advisors, which is meeting this weekend at the Radisson Patrick Henry Hotel.
The conference theme is advising clients of their final choices.
That translates as estate planning, but Briaud said clients have little trouble facing the ultimate fact. Even people who are leaving their assets behind generally want to avoid unnecessary taxes.
Despite that, few people write wills, said Paul Barringer of Lynchburg, the organization's treasurer. Even many lawyers don't do it.
Financial planning for life and death should mesh, Barringer said, but people may have to change lifetime arrangements for their estate plans.
Some people will play for a sophisticated estate arrangement, he said, then fail to make related changes in titles.
Mary Malgoire of Bethesda, Md., a former president of the group, said financial planning is a painless way to address the issue of estate planning.
After considering a budget, taxes and investments, she said, estate planning flows naturally as part of the process.
Briaud said few people under the age of 40 consult a financial planner.
People come in their 50s when their children are finishing college, Barringer said. Typically they didn't plan for their children's education, so their assets are depleted just as they are facing retirement.
Barringer sees as many grandparents as parents planning for the education of children.
However, Malgoire said, things may be changing. The 1980s were excessive, speculative years, she said, when "there was always another dollar around the corner." Now people are seeking ways to save.
And the baby boomers are well into their 40s, Briaud pointed out, creating a boomlet of people entering financial-planning years.
Briaud said the organization has 310 members. Unlike larger groups, it is limited to planners who work for a fee paid by the client rather than for commissions on the products they sell to the client.
The Roanoke conference was limited to advanced planners with five year's experience. About 40 people are attending.
Malgoire said most people who call themselves financial planners work for commissions on investments they sell, "because it's much easier to make a buck selling a product."
She said most consumers don't know how to distinguish stockbrokers, insurance agents, accountants and planners. Those who retain fee-only planners, Malgoire said, "have a better shot at more objectivity," because those planners sell only their advice.
The organization strongly supports a bill introduced in Congress by Rep. Rick Boucher of Virginia's Ninth District that would regulate the financial-planning industry and require disclosure of the planner's source of income.
Malgoire said one couple that may testify on behalf of the bill will tell how they were convinced by a planner to refinance their home with a larger mortgage at higher interest and put all of the money into limited partnerships.
The planner earned 10 percent commission on the sale, she said, and the partnerships have little value.
What the man did was legal, according to Malgoire, but the couple might have hesitated had they known of the high commissions they were paying.