Financial planners rebuffed by military

Thanks, but no thanks. That's the message the U.S. military is sending to financial advisers and groups representing advisers who want to offer free financial planning to active-duty servicemen or women, or their families. Indeed, for much of the past decade, the Financial Planning Association and the National Association of Personal Financial Advisors have tried to extend their members' services to military personnel and their families. For the most part, the military has rebuffed their efforts — mainly out of fear of exposing its members to financial predators. NAPFA, for example, last year attempted to dispense financial advice at no cost to military personnel looking for help with debt, saving and retirement through its Your Money Bus Tour. The tour, which involved financial advisers in 25 cities, was not allowed to enter military bases. In 2008, the Financial Planning Association joined with the Department of Defense to offer financial planning presentations on military bases throughout the country. The program, however, has largely fizzled due in large part to lack of interest on the part of the military, said Amira Tart, director of pro-bono services for the FPA. “The advisers are really trying to help,” said Ms. Tart. “I'm not military, and that's been an obstacle. They trust their own, and they want people who have been in the military. It's on us to keep reaching out to them.” The military has good reason to be skeptical of outsiders. In the past, service members have been victimized by advisers pitching pricy insurance and questionable investments. First Command Financial Planning Inc., which caters to military professionals, ran into trouble with securities regulators in 2004 and was fined $12 million by the Financial Industry Regulatory Authority Inc. for sales practices that allegedly included making misleading statements and omitting information to clients. In 2006, American-Amicable Life Insurance Co. and its affiliates agreed to pay $70 million to settle allegations that it targeted military personnel with deceptive sales practices. Congress in 2006 passed a law to strengthen protections for soldiers against questionable sales of financial products. “Sadly, people got burned some years ago, and we don't want to lead the military to someone who will take them for a ride,” said Holly Petraeus, director of the Council of Better Business Bureau's Military Line Program, which provides financial education to military personnel. “It's a bit of a dilemma,” said Ms. Petraeus, whose husband is Gen. David Petraeus, head of the U.S. Central Command. “We get offers quite frequently from financial planners to come and help, and if it's going to be on the base, we have to say no.” April Cunningham, a spokeswoman for the Department of Defense, confirmed in an e-mail that advisers are prohibited from doling out specific investment advice, or soliciting business, on military bases. They are, however, allowed on bases to teach basic financial principles to members of the military or their families. Despite the cold shoulder, planning groups continue to try to gain access to military personnel. The Foundation for Financial Planning, a non-profit group that connects planners with people in need, is working to connect more advisers with military personnel, said Jim Peniston, executive director of the group. In 2007, the foundation provided the FPA with a $295,000 grant to support its pro-bono programs with military personnel who served in Iraq and Afghanistan. “I think the military is open to doing things, but at the same time, they're cautious,” Mr. Peniston said. “We're starting the conversation.” Over the past two years, the foundation helped 1,742 planners get in touch with more than 45,000 members of the military, Mr. Peniston said. “There are a lot of truly patriotic financial planners out there; many will charge nothing or very little to military customers,” Ms. Petraeus said. “Sadly, the ones who are bad make it difficult for everyone.” One of the easiest ways for advisers to get involved is to meet with military members off base at so-called yellow-ribbon events before the servicemen and servicewomen are deployed overseas, Ms. Petraeus said. That is exactly what has worked for Dick Power, a former Army colonel and now a sole practitioner in Walpole, Mass., who serves 25 clients and manages $25 million. He speaks with hundreds of National Guard members and reservists before they are deployed. Mr. Power tells advisers that there are too many obstacles to working with full-time service members and that they instead should focus on reservists and the National Guard. “I tell advisers not to try to go on the military installations,” he said. “Those are for full-time military members who have their own cadre of financial support. The help is needed in the Reserves, where the life disruption is greater,” Mr. Power said.