Fee-only financial planners may believe in their heart of hearts that fees are the best way to work with clients, but their own personal faith is not enough; they must sell vendors on the concept as well. If companies don't structure products that a fee-only planner can handle without compromising the NAPFA "fiduciary oath," then he or she has nothing to offer clients but consultative services. Clients expect something more.

And financial advisers can deliver. Over the years, a tight-knit group of fee-only planners, specialized consultants and flexible vendors have created funds, insurance products and even 401(k) plans to fit smoothly with a fee-only practice. There is no proof that the fee-only way is the best way or the method destined to succeed above all others, but these fee-only products serve as a remarkable testament to planners' resourcefulness. Most importantly, they should compel all planners and all vendors to rethink the way financial products are marketed and sold in the United States.

Mutual funds, at least, are simple for the fee-only planner to work with. They have long been available in no-load versions, and no one is complaining about the variety. In fact, many funds seem eager to catch advisers' attention. Like many planners, Marvin Burt, of Burt & Associates in Rockville, Md., goes after no-load institutional funds, which are aimed at large institutional investors and professional planners, as opposed to individual investors on their own. Costs tend to be lower, he says, "and they keep us up to date and provide us with research." Burt uses funds from the Vanguard Group, T. Rowe Price and PIMCO.

Joel Ticknor, of Ticknor Financial in Reston, Va., also finds plenty of products, especially with Vanguard, but sounds a note of caution about the future. "Will we see a step backward? Some families, such as Janus, have been adding load products," he says. "There's a fight for shelf space in the marketplace." Still, no one believes the market is actually shrinking. With so many options, planners seem more worried about finding the time to do the necessary research to find exactly the right fit for a client.

For planners who want even more choices, there's the possibility of magically turning a load into a no-load. Says Sameer Shah, a planner in Tampa, Fla., "You can offer Putnam load funds with no-load at net asset value." Nancy Bryant, of Bryant Financial Advisory in Towson, Md., says some funds will waive the load if certain minimums are met.

Other planners go the specialty route: funds that often deliberately remain out of the limelight and tend to deal with other professionals in a limited market. Claire Saunders, director of product management for Jones & Babson in Kansas City, Mo., says her firm does not limit itself to working with advisers, but does emphasize its no-load funds. In fact, the firm introduced a new line of no-loads, the J&B Funds, at the end of 2000, which she says are especially aimed at fee-only advisers. The firm has set up an advisers-only Web site, www.jbadvisor.com. "Fee-only planners have been a major channel for us," Saunders says. "Personally, I think more investors are turning to professionals and are willing to pay for their advice."

That's a trend that Richard Sincere, president and CEO of Sincere & Co. in Holliston, Mass., is betting on. His company acts as a type of consultant, targeting "financial planning firms that would like to add value," he says. He looks for products that fee-only planners would like.

"Take Pictet," he says, referring to the 200-year-old private Swiss bank. "We offer some of their products, such as the International Small Companies Fund and the Eastern European Fund. Companies like that want to work with professional advisers." There are minimums for a number of funds Sincere works with, but he doesn't think they're hard to meet. "Some require a $50,000 minimum -- but that's a total from one adviser, not from each client." The key advantage for advisers, he says, is being able to provide access to funds clients can't get access to by themselves."

But for exclusive and offbeat options for fee-only planners, nothing beats Dimensional Fund Advisors of Santa Monica, Calif., which bases its funds on complex economic theory and has close ties to the University of Chicago. "We focus exclusively on providing engineered investment strategies to professional investors and do not market or distribute our funds directly to the public or through securities brokers," declares the company's Web site (www.dfafunds.com), which, by the way, doesn't even include the company's phone number.

The company's no-load funds have proved popular with a number of fee-only planners. "You can do business with them by becoming an approved adviser," says Shah, and Ticknor also considers DFA funds. The firm boasts U.S. equity, international and fixed-income strategies. There's a lot of information on the Web site, which is just as well; the company never speaks to the press.

Handling insurance products while remaining pure is a little trickier. "Insurance for fee-only planners is a mess," says Shah. Still, he has found solutions. Basically, fee-only planners have had to let go of a slavish devotion to dogma: Refusing to accept commissions is laudable; refusing to work with people who accept commissions is obsessive. "Let's not be pure. Let's be reasonable," says Mark Wilson, a vice president and fee-only planner at Tarbox Equity in Newport Beach, Calif.

Like many fee-only planners, Wilson has worked with commission-based professionals and provides objective advice to clients who buy their products. "We work with low-load insurance and we can refer clients to independent agents." Wilson discusses each client's needs with the agent, to make sure the client gets the appropriate product.

That's been the dual model for many fee-only planners: access to low-load products, which do not involve a commission, and referrals to traditional agents, who usually do work on commission. Either way, the planner can stand back and provide advice, objectively making sure the client gets the right product and even going over the technical details with the agent or company.

Eric Rabbanian, of Rabbanian Financial Planning in Austin, Texas, says, "You have to establish a relationship with agents you trust, you understand. I need to know they sell the right thing. They will call me if they think of something new that might be appropriate for my clients." It's the same arrangement Rabbanian has with lawyers he works with. "Other professionals are usually eager to work with us once they know what we're about. And the planner acts like the quarterback, working with everyone."

The other model, sometimes used in conjunction with traditional insurance agents, has been low-load insurance, popular with Wilson and many others for its absence of commissions and higher cash surrender values. (Low-load insurance is an essentially commission-free insurance product, the equivalent of the no-load mutual fund. For more on what "low-load" means, see Crossover With Low-Loads). Ticknor agrees: "I don't find insurance hard. I find low-load products. I can find what meets my clients' needs."

Low-load can be both versatile and inexpensive, and fee-only planners are making it do a lot of tricks. Planner Chris Brown in Gaithersburg, Md., often has new clients do a 1035 exchange from current life insurance products into low loads -- and does the same thing with annuities as well. The reason is simple: "Client death benefits can double with low-load," he says. "Take a client who has a 1987 single-premium policy. The cash value could be $400,000 and a death benefit of $600,000. There could be 2% expenses off the top, so we'd move to low-load. The commissions eat up so much." Yes, he agrees, it can be confusing for clients, so he recommends fee-only planners serve as low-load insurance advisers. "We do the analysis and work with the companies" on behalf of clients.

Bryant points out that not every company offers low-load insurance; research is necessary. Nor is every independent agent able and willing to work with fee-only planners. However, some highly focused consultants and companies have sprung up to make sure the clients of fee-only planners get the products they want.

John Ryan, CFP, of Ryan Insurance Strategy Consultants in Greenwood Village, Colo., an independent insurance brokerage firm, fell into the market almost by accident when he began providing insurance for an early NAPFA member. For the past decade he has been marketing life, disability and long-term care insurance to NAPFA members for their clients. Working on commission from the insurance companies he does business with, "I'm a resource and a consultant to planners," he says. "No matter where they are, I have my office next to theirs, figuratively." Ryan says he believes in term life insurance "from good quality companies -- competent insurers who practice fair underwriting."

But the planner calls the shots, and Ryan can provide other products as well through his network of contacts, such as variable, whole or universal life. "Take disability insurance: I help planners figure out how a client can supplement an employer's plan to raise limits, or how to structure such insurance for an entrepreneur," he says. "For long-term care insurance, sometimes self-insurance is best, sometimes the client needs to buy extra. You have to look at the cash flow." Ryan works with 12 companies that provide long-term care insurance.

Ryan doesn't claim he can replace the planner, but does provide advice to planners who have to help clients with insurance needs: "It's uncomfortable for planners to bring this up, but they do have to discuss their clients' health history." It's not unlike planners sometimes becoming de facto marriage counselors, he says. "Then I tell planners to get copies of their clients' current plans and fax them to me." Investment advice is fine, but many planners may need to delegate insurance advice, says Ryan.

Also emphasizing insurance for fee-only planners is Judith Mauer of Low Load Insurance Services in Tampa, Fla., which is designed "to provide financial advisers with comprehensive low-load insurance consulting and support services," according to the company's Web site, www.llis.com. Like Ryan, LLIS is paid by the insurance companies they do business with. "We have a process," says Mauer. "With new planners, we work out a relationship. Some just want access to term insurance. Other planners may have clients who want whole life. We help match planner and client with the right product." Like Bryant, who uses LLIS's services, Mauer emphasizes the efficiency of low-load insurance, especially with the uncertainty surrounding estate tax reform.

"Consider a client with a possible $4 million estate tax liability today," says Mauer. "You have to make a decision based on what is happening today, but you may need to modify the plan later. We help set up a plan that has the client paying a gift into a trust. The trustee pays the premium out of that -- say, $20,000 a year." But if the estate tax is going to be repealed or radically changed, as seems likely, this insurance may not be necessary someday. "With a low-load insurance product, the trust can get it back."

Mauer says this is not a common product. "Low-load insurance is one of the best-kept secrets in the financial world," she says. Why? Because Americans may be used to the traditional commission-based relationship or, says one planner, commissions generate the necessary money for big marketing campaigns, making low-loads a forgotten stepsister.

That may change as insurance companies increasingly recognize the value of the fee-only channel. Jeffrey Kujanson, CLU, ChFC, director of business development for ING Southland Life Emerging Markets in Atlanta, says his company has been offering low-load products for years. "We cater to objective advisers," he says, handling life insurance, annuities and mutual funds. "Clients are looking for an alternative, and we're seeing more fee-based advisory services, and they may have difficulty finding the right price structure." In the fee-only arrangement, "product and service are separated," he says.

Also aiming at the fee-only market is Ameritas Direct, part of Ameritas Life Insurance in Lincoln, Neb. (www.ameritas.com). President Donald Reiser says Ameritas started offering a fee-based universal life product in 1988, "when the public was becoming increasingly educated" about fee-only services. A former planner himself, Reiser has become a standard-bearer for the service-oriented insurance industry. "We like to guide advisers through our products," he says. "We definitely see the fee-only planner as a growing channel." Taking a long-term view of the financial partnership of insurer, adviser and client, Reiser says, "If you are building a relationship, you have to win together."

But why stop with new ways of selling mutual funds or insurance? "Fee-only planners need to look at 401(k) plans," says planner Mark Wilson. "Our company helps set up these plans for a fee, so we can shave 50 to 100 basis points off the final costs. Especially with larger plans, the employee is net beneficiary, with better performance of his retirement investments." With the need to pay a commission eliminated, many -- but not all -- sponsors will waive it altogether. He recommends 401(k) consulting as a promising niche for the fee-only planner.

Clearly the ingenuity of fee-only planners has done more than create jury-rigged solutions. Rather, advisers are continually inventing new ways of distributing financial products. The market will ultimately decide if fee-only or commission-based planning is the wave of the future or if both will uneasily co-exist. Meanwhile, "we're being made welcome" by product vendors, says planner Marvin Burt. But he was too busy to talk long. With the market the way it is, "fewer people are trusting their own judgment. We've seen this in 1987, 1990 and starting again in 2000." So they're turning to professional advice, including fee-only planners. "We've had a huge client increase as people realize they can't do it themselves. Our phone has been ringing off the hook."