A financial planner, bankruptcy attorney, credit counselor, insurance company investigator, financial analyst and the director of a financial outreach organization walk into a room at Florida Gulf Coast University.
Perhaps not surprisingly, they all began advising the 60 other people in the room during a panel discussion held Thursday afternoon at the University’s Herbert J. Sugden Hall.
And in this economy, the panelists said, such advice is no joke.
Throughout the discussion, one panelist focused on a single thought: know who are investing with.
“None of Bernie Madoff’s funds were registered,” said Scott White, a veteran financial planner and president of the Financial Planning Association of Southwest Florida, which put on the event in coordination with the university.
Funds such as those managed by Madoff, White said, lack the transparency needed to ensure the investment is sound. He noted that some financial consultants lack transparency as well, pointing at some financial advisers specifically.
“There’s only one title that is a licensed financial planner, and that is a certified financial planner,” White said. “When we operate under our license as a certified financial planner we have to work in our client’s best interest. We are held to that fiduciary responsibility.”
Among those in the audience, who were also offered the opportunity to receive a free financial consultation, were many college students encouraged to attend the discussion for class. But there were members of the community, as well. Estero resident Paul Kingston, 72, said he was impressed with the quality of the panel and his free consultation gave him hope for the future.
“I thought it was well done. Very informative. There were people with varying expertise in various disciplines,” said Kingston, adding that he didn’t realize all of the help that was available to him when it comes to planning his financial future. “It gives you something to think about. I would not otherwise be aware of the disciplines.”
Members of the audience were offered an opportunity to ask questions, which focused on recession-related issues.
“If you take out your investments and the goods and services are more expensive, then you have lost money,” White said in response to a question about how federal spending will affect inflation. “Your greatest risk is not that you’ve lost money. The greatest risk to someone in retirement is inflation.”
FGCU senior Kirsten Crame, 24, asked whether she should spend the paycheck withholding reductions she will receive through the federal stimulus bill. The stimulus payments are designed to encourage citizens to spend the money, and Crame felt that logic was the same type of thinking that contributed to the recession’s creation: spending beyond one’s means.
“I tend to agree with you. They’re trying to fix the problem by encouraging the same kind of behavior that got us into this mess,” said panelist Diana Durante, a financial examiner and analyst for the Florida Office of Financial Regulation. “If you feel comfortable saving your money, save your money, and let others spend theirs.”
But Roland Hawes, 85, wasn’t buying it. Though he showed appreciation for the event, during the panel he expressed concern over the cost of such financial planning services.
“Like the dentist, you don’t know how much you’re in for until you sit in that chair, and sometimes you don’t even know after that,” Hawes said. “Some people don’t go to the dentist, because they are afraid it’s going to cost more than they can afford.”
White responded by indicating that costs can range in the hundreds of dollars an hour or a percentage of the money being invested, but he said it is a issue all planners focus on.
“My dilemma is that if I charge an hourly rate, then people will only call me if they have a problem,” White said. “I’m supposed to prevent the problems.”
However, there are free services available. Panelist James Peniston directs the Foundation for Financial Planning, which supports pro-bono advice and outreach activities. Panelist Sandra Rains, a financial education specialist with the federally-approved Consumer Credit Counseling Service, said her agency can help boost individual’s credit scores.
“Knowledge is priceless, and right now with the foreclosure crisis and the debt and the management of it,” Rains said, “right now is the time to give our place a call.”
Daniel Delarosa, 22, can also appreciate some free financial advice. Delarosa is studying business management at the university, and he said he would never be able to afford the free consultation he received with a planner from Raymond James if it weren’t for the event.
“The underlying thought of this, being a student or someone that has a home and a family, you have to be aware of how to manage your finances,” Delarosa said, a bag on his back and a skateboard in his hand.
“I’m better off than I was two or three hours ago. I know how I can reach my financial goals.”