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Community Service - Military

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Stepping up free help to military

By Charles Paikert
December 20, 2004

NEW YORK - With newspaper headlines serving as an all-too-poignant reminder that members of the U.S. military need all the help they can get, financial planners are stepping up their efforts to offer free assistance to them and their families.

"It will be a major focus of our pro-bono efforts next year," said Clara Lipson, the New York-based director of pro-bono services for the Financial Planning Association, which is based in Atlanta and Denver.

"There's a major problem out there, especially with so many reservists now serving in the military," she said. "They don't have a support structure, and there's a tremendous need for financial recovery when they finish their tour of duty."

Crisis is seen

According to Mark Passacantando, director of pro-bono services for the FPA in Massachusetts and a managing member of Westwood, Mass.-based Financial Planning Partners LLC, inadequate financial guidance for military personnel has reached crisis proportions. "There are soldiers coming back as double amputees, which has profound financial consequences," he said. "Soldiers are coming back with all kinds of debt problems, and they have to assimilate back to their civilian job - if it exists." One of the FPA's major goals in 2005, Ms. Lipson said, will be to match military bases that need help with nearby FPA chapters that can provide it. Ms. Lipson denied that the damaging insurance and mutual fund gouging scandals re- ported earlier this year by The Wall Street Journal were the catalysts behind the FPA's flurry of military pro-bono efforts. "This is really an outgrowth of the pro-bono program that we started after 9/11. When the Iraq war began in 2003, we immediately got phone calls from our members that we need to do something," she said. "We also got a call from the Department of Defense and the National Military Families Association," Ms. Lipson said. "It was clear that military families were going to be impacted financially and that we needed to help out." This summer's insurance scandal did, however, give the FPA's efforts "more impetus," she acknowledged. "It became even more [urgent] that something needs to be done," Ms. Lipson said. The scandal "brought the issue more into the limelight, and we didn't want to see the abuses perpetuated." Just last week, Fort Worth, Texas-based First Command Financial Planning agreed to pay $12 million to settle charges by NASD and the Securities and Exchange Commission that it used misleading sales material to promote high-fee mutual funds to military officers. Local FPA chapter members said their pro-bono efforts were being driven by either personal involvement with the military or growing requests for help from local military bases or service families. Ralph Lunt, a lieutenant colonel in the Air Force Reserve and a vice president for Strategic Capital Advisors in Cleveland, said that as the war intensified this year and more reservists were being called up, he realized that other reservists "might not be as familiar with the financial repercussions if they get called up." As a result, he began giving training sessions to other planners who volunteered to do pro-bono work for military families to explain such issues as "the unique qualities of military benefits" and how they meshed - or didn't - with a reservist's civilian benefits. Mr. Lunt also began doing a personal-finance TV show on The Pentagon Channel, the military's in-house network, "to get the word out and educate people more." In addition, he has met with the Volunteers of America, which has a military rehabilitation facility in Cleveland. In 2005, Mr. Lunt said, local financial planners will be offering regularly scheduled classes on personal finance for servicemen undergoing rehabilitation. "These are veterans who will be re-entering the work force," he said, "and they need to know as much as possible." Pat McDonald, another planner with ties to the military, contacted his local Red Cross chapter in Orange County, Calif., earlier this year. It put him in touch with a Marine Corps base in the area. Mr. McDonald, who is an Air Force veteran and owns an eponymous financial planning firm in Placentia, Calif., set up a group of planners who will offer financial counseling to families of active-duty casualties next year. "We'll help them deal with benefits, as well as collecting insurance and their children's education and any other estate or budget planning need they may have," he said. Vietnam veteran Steven D. Wightman, principal of Lexington, Mass.-based Wightman Financial Network LLC, said he became aware of reservists' need for financial planning assistance when he was called up for the first Gulf War in 1991. "I made up my will and packed my bags," he recalled. This year, Mr. Wightman is working with four other local planners and offering a seminar to 200 reservists at nearby Fort Devens on such matters as wills, debt management, educational benefits for reservists and available financial planning resources. Mr. Passacantando said 43 financial planners throughout Massachusetts have volunteered to do pro-bono work with soldiers and their families, including those at Fort Devens. Initially, he said, it was difficult to persuade the military command to open its doors. But when Mr. Passacantando asked the officers if they wanted the soldiers "thinking about their personal financial problems instead of bullets flying around them, that did the trick," he recalled. "The Marines said, 'When can you come?'" Currently, Mr. Passacantando said, planners in Massachusetts are answering questions from servicemen by e-mail, phone or in one-on-one sessions. Next year, he said, the FPA hopes to heighten awareness of the program for all branches of the military around the country. "With increased communication and cooperation from the military," Mr. Passacantando said, "we want to leverage what we've done with national and other state chapters. The country is in a unique situation right now, and we want to make a difference."


Amid war, military families tap financial resources

By Craig M. Douglas

METRO WEST NEWS, Sunday, March 23, 2003

Jennifer Johnson puts her best foot forward when discussing her husband Mark's military service, which was just extended indefinitely due to war with Iraq.

Life is good, the 27-year-old Hopedale resident says, and she's intent on making do until her infantryman, whom she is very proud of, is discharged from duty as a U.S. Marine.

Nonetheless, it's easy to hear the disappointment in Johnson's voice as she runs down a list of "adjustments" the couple has made over the past two years, when Mark was shipped overseas, offered military leave and then shipped out again for battle. The flip-flop of events has left the Johnsons with a total of six months together since their hastened wedding in December 2001.

And while absence may make the heart grow fonder, military pay and a shaky economy have all but frayed the nerves of the former office administrator, who recently filed for unemployment after losing her job at a technology company in Marlborough.

Today, Johnson is living with her parents, trying her best not to dip into her husband's meager paycheck which, she hopes, will buy them a modest home someday in MetroWest.

"He was supposed to be discharged last year in either March or February, but that was (scheduled) before 9/11 and all of this (war with Iraq) happened," said Johnson, who had originally planned to be married in May 2002. Despite all of the time and expenses that went into scheduling the spring wedding date, uncertainty after the terrorist attacks on New York and Washington, D.C., prompted the Johnsons to cut their losses and, instead, opt for a more immediate ceremony before Mark's inevitable deployment.

"All I really want to do is settle down and have a normal relationship. It's hard," Johnson said. "I have no resentment toward the military, because I've always known there was a chance this could happen. I just have to live on a budget, pay for the things I need and do without the rest...just do what I need to do."

As strange as it may sound, the Johnsons are two of the lucky ones. Thousands of families, with more than one mouth to feed, are often left to deal with the financial hardships brought on when a spouse or parent is called to active duty in the military. For reservists and members of the National Guard, service abroad can mean a dramatic drop in pay and considerable uncertainty, both financial and emotional, during their time served.

Under federal law, companies are required to hold an activated employee's job for up to five years of service and to extend his or her benefits for at least 30 days. There are no stipulations regarding the extension of pay or bonuses, leaving the average staff sergeant only $2,400 a month -- the equivalent of around $40,000 a year in gross salary -- to send back to a family at home.

With the plight of military families in mind, the U.S. House of Representatives moved last week to grant temporary tax relief as the operations in Iraq and Afghanistan unfold.

"Most families live right on the edge. There's usually no cushion there," said Steven D. Wightman, a financial advisor and Gulf War veteran living in Lexington.

As a master sergeant trained to deal with biological and nuclear warfare, Wightman said his family was forced to address financial issues that could arise during his time away, and he remembers well all of the morbid discussions and contingency planning that accompanied his deployment.

Fortunately for Wightman, the war ended before he was shipped overseas, nor were any weapons of mass destruction unleashed on American troops. Still, he said his last-minute scramble to straighten out his will, insurance contracts and finances was a lesson in the potential hardships facing military families, who more often than not are stripped of their household's "breadwinner" when war or other military obligations occur.

"The consequences to families are always the same (when soldiers are activated)," said Wightman, who prepared with his wife and stepson for deployment during the first Gulf War. "The only difference is that during war, a husband or wife actually has their life on the line."

Today, Wightman still answers the call to duty, even though he is long retired from the military. As a member of the National Association of Personal Financial Advisors, he and a network of his colleagues are volunteering their professional expertise to help military families persevere through an uncertain financial future. Whether it be a mortgage refinancing, a simple budget plan or a rundown of their legal rights and resources, Wightman said basic financial planning is a must for many military families, who are currently being squeezed by both turmoil abroad and a slumping economy at home.

"People tend not to be too concerned until a hot iron falls in their laps," said Wightman, who volunteers at the Family Support Center at Hanscom Air Force Base in Bedford. "The biggest thing is always the `New Budget.' Families need to learn to scale down their expenses as much as possible -- to rethink things. The key is finding ways to make up for their income gaps."

To do so, Wightman said families often have the option of renegotiating the terms or rates of their mortgages. For families who have lived in their homes for a number of years and are having an immediate cash crunch, they also have the option of drawing from, or "tapping into," the equity built up in their house.

In addition, Wightman and other financial professionals give military families an overview of their rights, ensuring them that no derogatory credit action or foreclosures can occur while their enlisted spouse or parent is on active duty.

"What's unique about Hanscom is that, with the closure of so many military institutions, we're sort of it for New England," said Dawn Andreucci, chief of programs at Hanscom's family support center. "We're really the only full-service military installation in a six-state area. So, we end up doing a lot by e-mail and phone."

Andreucci, along with Sondra Albano, the director of the family support center, manages programs for military families facing myriad issues, both financial and emotional. With a number of resources at their disposal, the center's staffers said their roles are equally balanced between preemptive and emergency programs.

"I'd say we have a two-pronged approach to financial support at the center," Albano said. "As soon as a soldier is notified, we have a family-readiness officer give the family a pre-deployment breakdown -- educating them about the emotional cycle as well as practical preparations to prevent problems from ever occurring.

"We also have an emergency component that assists families in desperate situations. Here, we have the Air Force Aid Society, although each branch of the military has its own assistance program. They provide no-interest loans and even monetary grants, depending on the member's ability to pay back a loan."

Albano said military families also have access to the base's commissary, which rivals the size and scope of any supermarket in the surrounding area. Albano estimates the average commissary shopper saves between 20 and 30 percent on their grocery bills.

Speaking from experience, the volunteers and employees at the Hanscom program all agree it is in every military family's best interest to take a trip out to the base, even if it means a one- to two-hour drive from an out-of-state community.

"If there is one thing that I can stress, it's not to go it alone. It's too tough," Wightman said. "There are people out there who really want to help."

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