Fast times for financial planners

Financial planners have been in high demand since Sept. 11.

"We've found that immediately after the attack on the World Trade Center, phones were ringing off the walls," says Clare Stenstrom, of Bourne Stenstrom Capital Management in New York.

"Calls have started to settle down now," adds Ms. Stenstrom, who is also president of the Financial Planning Association of New York. But all the same, she finds herself talking to clients - both existing and new ones - more than ever about how to deal with the current economic climate.

Most investors want to know two things:

• How to get their financial affairs - such as insurance policies, wills, and personal records - in order.

• How to structure a long-range investment plan to garner gains at a time when financial markets have hit the skids.

Calls delving into such subjects have been intense, says Gary Schatsky, chairman emeritus of the National Association of Personal Financial Advisors, in Buffalo Grove, Ill.

In addition, Mr. Schatsky sees a growing number of people using financial planners rather than brokerage houses for their investment needs. Whatever the reasons, he notes a number of large brokerages are laying off employees, reflecting the downturn in their primary business.

The shift to financial planners suggests that "investors don't want to buy financial products pushed on them by a broker," he says. "They are really eager to find someone that they can trust."

Another subject that may have turned off some investors from brokerages: so-called "managed accounts," driven by computer programs and increasingly popular among brokerage firms. "People are looking for more direction for their investments than [they can get] from managed accounts," says Scott Kahan, president of Financial Asset Management Corp. in New York, and a member of the Kaplan College financial-planning advisory board for Kaplan's online education program (www.kaplancollege.edu).

Jill Gianola, of Gianola Financial Planning, in Columbus, Ohio, says many of her newer clients need more-comprehensive planning than can be given by a brokerage house representative.

Many of her older clients have called to make sure that their retirement plans are still adequate. "They ask me, 'Have the rules changed for my retirement?' "

In terms of overall requests for help, time of year plays as big a role as time of life.

In September, parents with children in school or heading off to college tend to look for financial advice, says Mark Johannessen, a certified financial planner with Sullivan, Bruyette, Speros & Blayney in McLean, Va. At year's end, people seek to form a plan for the new year. And April - tax time - always encourages planning.

The new demand for help began to grow even before the 11th, says Mr. Johannessen, amid the economic downturn.

Johannessen, in his practice, notes the same factor noted by Stenstrom: Investors want to make certain "that their estates are in order."

They also seek to ensure that they have enough liquidity - assets in money funds, or access to bank credit lines - to carry them through unexpected financial crises.

But new clients, he says, are also seeking to "look long" - to make sure they can take advantage of evolving market conditions to post gains above the meager results now being produced by money-market funds and certificates of deposit.

For most, he says, that means having a position in the stock market, even though market returns are currently negligible to negative.

Experts say individuals can often put together a financial plan on their own.

Investors who do so should keep on top of the market, says Mark Johannessen, a certified financial planner in Virginia.

He adds that they should:

"Have enough liquid assets on hand."

"Maintain savings and investing discipline" - salting away as much as they can on a systematic basis.

"Not lose sight of the next 10 to 15 years," such as continuing to fund 401(k) plans, or other retirement funds.

"Insurance is very important," adds Clare Stenstrom, of Bourne Stenstrom Capital Management in New York.

"We've found that most people do not have disability insurance," she says.

For anyone crafting a long-range investment plan while protecting his or her immediate financial position, she says, comprehensive insurance is a must.

In many financial-planning offices, discussions about estate planning have taken on a new urgency since September's terrorist attacks in the US.

In particular, people want to know how to craft a comprehensive will, says Scott Kahan, head of Financial Asset Management Corp., New York.

Investors, he says, want to protect their estates and their relatives, while avoiding as many taxes as possible.

Mr. Kahan says he always urges clients to plan carefully for the disposition of their assets, including property, while accounting for the needs of beneficiaries, especially spouses.

In some cases, where one wishes to avoid probate for whatever reason, a trust is more desirable than a will, enabling an estate to pass to other parties in greater privacy.

Many older investors, including retirees, Kahan says, "don't want to be dependent on their adult children." So they tend to "spend down" their own money. But the danger, notes Kahan, is that they "might spend so much that they don't have enough left to provide for their later years."

A will, he says, helps focus attention on one's total assets - and how best to use them or set them aside for heirs.

Many financial planners do not personally draft wills or trusts. Rather, they use the services of estate lawyers and accountants. In drafting a will, legal experts say, it is important to remember the basics:

• Most states require you to be at least 18 to set one up.

• You have to be of "sound mind" - aware of your assets and the consequences of leaving them to others.

• Wills must usually be typed in forms acceptable within your state. They must be dated and signed. They usually require at least two witnesses, although some states - Vermont, for example - require three witnesses' signatures.

• Having a witness sign and notarize a "self proving" affidavit (which establishes his or her identity) may expedite matters if the will goes into probate, as is typically the case.

These are just general rules. While people can in some cases put together a simple, binding will on their own - writing it out in longhand, or using forms from websites - it is generally safer to use an attorney, legal experts say.