Cypress West Federal Credit Union

1. Who is Jim Frazin? Jim Frazin was the CEO of this credit union when it was still named Qantas FCU. He left in 1990 and returned in 1996 to do marketing and business development. He has 20-plus years experience managing small businesses and doing small business consulting. He became Certified Financial Planning™ licensee in 1990 and started his financial planning practice, Your Money & Your Life, in 2002. He became an Investment Advisor Representative of the SEC-registered Investment Advisory Firm, First Affirmative Financial Network in 2003. In 2003 he received his ACCREDITED INVESTMENT FIDUCIARY™ designation. And in 2004 he joined The Garrett Planning Network.

2. What is First Affirmative Financial Network? First Affirmative Financial Network, LLC (FAFN) is an independent investment advisory firm registered with the Securities and Exchange Commission (SEC). They support a nationwide network of investment professionals who specialize in helping clients engage in socially responsible investing (SRI). They provide consulting and asset management services for institutions seeking to integrate mission and values into investment strategy and decision making.

First Affirmative's investment programs cover all major asset classes. Network Advisers offer a full array of financial services designed to help clients incorporate personal values and social concerns into custom formulated investment strategies.

Investors have more opportunities than ever before to make sound investment choices that offer competitive returns and positive social impact. First Affirmative works to ensure that our client's assets are helping to build a future in which prosperity comes not through the impoverishment of others, nor through gains that despoil the environment, nor from decisions that sow the seeds of future conflicts.

First Affirmative focuses its business and client services on promoting the direct relationship between financial decision-making and the public good. We are dedicated to a fundamental transformation process focused on creating a more just, sustainable and humane global society.

3. What is The Garrett Planning Network? The Garrett Planning Network, Inc. (GPN) is a nationwide network of professional, Fee-Only financial advisors. GPN members are dedicated to providing competent, unbiased financial advice to people from all walks of life, on an hourly as-needed basis. Only 1% of the nation's financial planning firms are structured this way.

4. Why are there so many players? Including the credit union, there are four entities involves in this arrangement. The credit union's board and management understand the need for financial planning for members. They have arranged for Jim Frazin to work with members on an independent, fee-only basis. In this way there is no cost to the credit union keeping expenses low. Members who wish to use Jim Frazin's fee-only services enter into a fee agreement. Jim sells no products and does not receive commissions on any product that he recommends that the member chooses. While he does have potential conflicts, this arrangement keeps them to a very low minimum. If you would like to understand more about how Jim works, please call him at 415.337.4566 or (if outside Northern California), 866-882-7817.

Jim had two objectives in affiliating with First Affirmative (FAFN). FAFN and the credit union have a similar mission and that is to make the world a better place. What could be mnore socially responsible than members investing in each other? Also, Jim is not a broker or securities dealer (all of whom take commissions) and so he works under First Affirmative's SEC registration. This gives him the ability to do business in any state in the US.

The Garrett Planning Network is technically not a “player.” Jim joined Garrett in order to affiliate with a second group of highly ethical planners where he receives training, marketing support and the camaraderie of over 230 other planners with the same vision.

As staunch consumer advocates and Fee-Only client fiduciaries, GPN Members demonstrate their commitment to serving the public's best interests (please see our definitions of these words, below). Nationally recognized Certified Financial Planner™ professional, Sheryl Garrett, founded GPN to further her vision of making competent, Fee-Only financial advice accessible to all people.

5. What is a “fiduciary?” A Fiduciary is someone who manages property for the benefit of another; exercises discretionary authority or control over assets; and/or acts in a professional capacity of trust, and renders comprehensive and continuous investment advice.

Primary Duty of the Fiduciary: To manage a prudent investment process, without which the components of an investment plan cannot be defined, implemented, or evaluated. Statutes, case law, and regulatory opinion letters dealing with investment fiduciary responsibility further reinforce this important concept.

6. What is the financial planning process? Financial planning is a multi-step process that provides you with two important things: (1) An in-depth review to determine your current financial situation, goals and dreams and (2) a blueprint that shows you how to achieve your goals and dreams for the future. I use seven distinct steps for developing a financial plan for you (see Building a Brighter Financial Future for details on the unique GPN financial planning process) Please remember that financial planning is a process . . . not an event.

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7. How do you create this blueprint? First I focus on your goals, objectives, priorities and values. For instance: the reduction of current and future income taxes may be an immediate goal, funding a quality education for your children and/or grandchildren may be an intermediate goal, and enjoying a secure financial future in your retirement years is likely to be one of your most important long-term goals. Another great goal in life for some people is creating wealth and/or leaving a legacy for your chosen beneficiaries or charities. You may already be on the road to meeting these objectives and simply need a new strategy, professional insight, or to fine-tune your plan. You may just be starting out, or you may be somewhere in between. Whatever your unique situation may be, everyone needs a periodic assessment of where they are on the road to meeting their financial goals. That's why I do an in-depth review of your current financial situation. Next, you need to know how you can set about achieving (or continue working toward) your financial goals. By focusing on cash flow, investments, taxes, pensions and retirement plans, estate planning, insurance issues, savings opportunities and other general financial matters, I design a customized financial plan for you. Finally, to achieve the intended results, you must implement and monitor your plan.

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8. Isn't that a lot of work? It is work - for both of us - but the good news is, if you follow your plan and maintain a disciplined approach, and monitor your results, you can rest well knowing you can reach your stated goals. GPN Members try to make the process as easy as possible for you. In addition to receiving professional advice on your most important financial concerns, I can also provide implementation and ongoing asset management services, if appropriate for your needs.

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9. What type of individual can benefit most from your services? Any individual seeking financial peace of mind can benefit from my services. As a Garrett Planning member, I will serve people at all income levels, from all walks of life. Clients have the flexibility to work with me on either a one-time, as-needed basis or an ongoing basis.

I welcome clients who simply need a one-time financial consultation or a second opinion, as well as those who need wrap-around or coordinated financial planning and possible ongoing asset management services.

Additionally, any business, non-profit, or organization seeking quality, unbiased financial education for their employees or members can benefit from my financial education programs.

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10. What is "Fee-Only" financial planning and why should that be important to me? Because I am a Fee-Only financial planner, conflicts of interest regarding compensation are minimized. I attempt to make the way I get compensated as transparent as possible. Because I do manage assets for a fee, I may have a conflict if I think you should invest in securities and you think you should purchase something or not invest in those securities. If this is the case, I will tell you.

I do not accept sales commissions; I work solely for my clients. Because I do not sell financial products such as investments (not the same as managing them) and insurance, there are no third-party relationships or outside influences to color my thinking and financial recommendations. For more information on Fee-Only financial planning, including the Code of Ethics, Fiduciary Code and member requirements to which I ascribe*, please visit www.NAPFA.org.

*Jim Frazin is not yet a member of NAPFA. He believes that he meets the qualifications and needs only submit his application and documentation and will do so by January or February 2005.

In addition, all GPN Member firms are Registered Investment Advisors (RIAs) or representatives of such firms. RIAs must comply with a host of regulations designed to protect the consumer. One important question you should always ask when considering a financial planner's services: "May I please have a copy of your ADV Part II?" This document contains important information about the planner's qualifications, fiduciary duties, history of any past violations, etc. I would be happy to send you a copy of my ADV Part II.

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11. What if I need to obtain financial products? While I do not sell financial products, I will offer specific recommendations and opinions regarding the purchase of the various financial products that may be appropriate for you. So, if you need to obtain an insurance policy or a new mortgage, invest into a portfolio of mutual funds, or find an estate planning attorney or tax professional, I can direct you to the resources you need and/or help you obtain these products and services. If appropriate, I can also help you implement your plan and set up your accounts.

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12. Do GPN Members provide only full financial plans? No. Although a “wrap-around” financial plan can provide the greatest benefits, I can limit my advisory services to your specific needs, such as cash management and budgeting, investment analysis or college education funding.

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13. We have little savings and a lot of debt. Will you accept us as clients? Yes. Some firms have income levels and/or net worth minimums but GPN Members realize that everyone has financial needs. I am delighted to work with people from all income levels, and all walks of life. Remember, "You don't have to have a fortune to start building one."

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14. I have already accumulated substantial assets and think I am doing quite well. And as I progress and build for the future, things seem to be getting more complicated. I want to be sure I am on track, but I don't always have the time or inclination to manage the myriad details by myself. Can you help me? Yes. People who need more sophisticated financial planning or advice will find my services appealing and beneficial. If you have a desire to simplify your financial affairs, one of my investment management programs may be right for you (see Building a Brighter Financial Future). If you are looking for a professional review or a second opinion to ensure you are on track, I can provide that, too.

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15. I'm in charge of the retirement plans and employee benefits at my firm. I would like to increase the number of employees who participate in our benefit programs. Can you help us? Yes. Corporate and employee education is key in building employee participation. My financial planning team can help your people understand the benefits of your programs. Please call to discuss your specific needs. I can custom-build an educational program for your company. I also can configure a low-cost retirement plan that provides adequate diversification and helps keep your company out of fiduciary trouble.

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16. What types of securities do you provide advice for? I provide advice for all types of securities, including mutual funds, stocks (as they relate to your portfolio holdings), bonds, bank deposits, variable and fixed annuities, limited partnerships and tax shelters. I also provide advice on mortgages, investment property, budgeting and cash flow issues, 401(k), 403(b) and other retirement programs, stock options, life and disability insurance, etc. If it has to do with money and finances, I can provide counseling, guidance and/or resources for you. Because I want my clients to know that they can call on me with any and all of their financial concerns, I use the slogan "Financial Planning and Advice for Everyday Life." Clients are encouraged to call me when they have a major life event, such as a new job, a baby, a marriage or divorce, or if they are planning to buy a new home or start their own business. I also encourage my clients to call me with more common everyday questions, such as: "How should I invest within my 401(k) or 403(b) plan?" "How can I reduce my taxes?" "What advice can you offer on refinancing my home?" "How can I maximize my Flex Spending Account, Cafeteria Plan or Section 125 Plan at work?"

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17. If I use you or other GPN Member to develop a financial plan, am I obligated to purchase the recommended products? Absolutely not. I will offer recommendations which in my professional opinion will meet your needs and objectives, but you are under no obligation to purchase them. In today's competitive market, it makes sense to shop around for the best available product or service. For instance, if you need to obtain a life insurance or disability policy, I will suggest the kind of policy, which riders and what amounts may be best for you. I will then direct you to a choice of companies that can provide a quality product at competitive prices for you. If you wish, I can help you purchase investments and/or set up your accounts with a third-party custodian such as a discount broker.

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18. What is your investment philosophy? As a financial planner and investment consultant, I believe in the following fundamental principals with regard to designing an investment portfolio and making specific recommendations: The purpose of a client's investment portfolio is to fund current and/or future financial objectives. The design of the portfolio must take into account the client's financial and social objectives, tolerance for risk, needs for current income and/or liquidity, and special considerations such as income and estate taxes.

The important thing to remember is that no one can predict the future. It is differences of opinion that make a market. Investment and economic "experts" provided with the same information often come to different conclusions. I do not suggest that I can, or that any of the money or mutual fund managers that I recommend, will make the correct decision every time.

I do believe, however, that studying the historic trends and relationships of investment classes and the philosophies and approaches of successful investment managers can provide valuable insight. The appropriate allocation of investment assets attuned to your goals and risk tolerance is the most important component in developing an investment portfolio. I believe that continuously saving, having a diversified, well-balanced portfolio, following long-term buy-and-hold strategies, and having patience, will increase the likelihood that one will achieve her or his long-term financial objectives.

Finally I believe that our investments play a paramount role in how well or poorly the world works for everyone. For these reasons, I specialize in socially responsible investments (SRI). These are investments in companies and mutual funds that are conscious of reducing pollution, treat their workers well, partner with the communities in which they are located, produce goods and services that are neutral or truly benificial. SRI shows you you can do well by doing good. See more below (link to end).

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19. How do you select investments for a client? Before I recommend any investment, I consider the current economic conditions, the outlook for that asset class or type of security and how this investment fits within your portfolio given your objectives, your tolerance for risk and your social concerns and values. For equity investments, I focus primarily on the philosophies, experience and track record of the management team. With fixed income investments, I look for the best yield available for a given quality of security given your goals and objectives as well as the direction of interest rates. As fiduciary for my clients, I strive to obtain the most appropriate investment vehicles to meet your objectives, while being very conscious of total expenses and risk exposure.

Furthermore, if you wish to have me manage your investments, My investment advisor, First Affirmative Financial Network (FAFN, www.firstaffirmative.com) and I develop an investment policy statement (IPS). An IPS is a “best practice” which places in writing your goals and objectives as well as details on a proposed portfolio, its risk/reward profile, monitoring, tax, social policy, proxy voting, rebalancing and other criteria that you or any third party can use to measure the performance of your portfolio.

20. How do you price your financial planning services? The fees are based on the actual time involved in meeting with you in person or over the phone, researching and analyzing your current situation, and providing specific recommendations and implementation assistance (if appropriate). Hourly rates vary from one GPN Member to another. I will give you an estimate of fees at the end of the “Get Acquainted Meeting,” when your needs have been fully identified.

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21. How much will my financial plan cost? A total financial plan will look at and develop recommendations for six or seven financial areas. The fee for a total financial plan will vary from client to client based on the specific needs and complexity of your situation. Please see my diagram Building a Brighter Financial Future to learn about the financial planning sequence and the client service options available. An estimate is provided after the “Get Acquainted Meeting,” when your personal needs are fully identified. Once your financial plan is complete, there are generally two or three levels of client/advisor relationships available to you (for more information, see Building a Brighter Financial Future diagram).

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22. Are your fees tax deductible? Yes. Section 212 of the Internal Revenue Code permits an itemized deduction for tax and/or investment advice in the miscellaneous section of Schedule A. It is subject to a 2% floor of the adjusted gross income on a personal tax return.

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23. What happens once my financial plan is completed? Depending on your needs, the actual engagement of services may end (please refer to Seven Steps to Building a Brighter Financial Future), but the majority of my clients choose some sort of Continuing Client Program. Because financial planning is a process, not an event, I offer ongoing services, periodic reviews and day-to-day consultation as requested and/or needed.

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24. How can I get started? The first step is an initial inquiry from you. Call me, if you are outside of Northern California toll free, at 866-882-7817, or 415-337-4566 if in Norhtern California, or email me at jf@shibboleth.com. All GPN Members offer an initial no-cost, no-obligation “Get Acquainted Meeting,” either on the phone or in their offices. For Get Acquainted Meetings, appointments are scheduled based on availability during regular business hours of 9-5, Monday through Thursday. Expanded office hours are available to accommodate special needs or emergency situations. Should you decide to engage my services, I will discuss which of our services and client tracks is appropriate for you. Most clients find the financial planning process to be stimulating and enlightening. The end result, of course, is greater peace of mind. I look forward to helping YOU build a brighter financial future!

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25. What is socially responsible investing? Socially responsible investing, also known as SRI, is the process of integrating personal values and societal concerns. SRI considers both the investor's financial needs and an investment's impact on society. With SRI, you can put your money to work to build a better tomorrow while earning competitive returns today.

Social investors include individuals and institutions such as corporations, universities, hospitals, foundations, insurance companies, pension funds, nonprofit organizations, churches, mosques, and synagogues.

For more information see: www.socialinvest.org, www.firstaffirmative.com,

26. How does social investing work? Social investing involves three key strategies:

SCREENING is the policy and practice of including or excluding securities from a private portfolio or mutual fund based on social or environmental criteria. Social investors seek to own profitable companies with outstanding employee relations, strong records of community involvement, excellent environmental practices, safe and useful products, and respect for human rights around the world. Conversely, they attempt to avoid investments that fall short in these areas.

SHAREHOLDER ADVOCACY describes investor efforts to submit and vote proxy resolutions as a means of influencing company behavior.

COMMUNITY INVESTMENTS includes programs in community-based financial institutions such as development banks, loan funds and community credit unions to support community development in the United States and developing countries.

Community Investments are accomplished mainly through three types of institutions: Community Development Credit Unions, Community Development Banks, and Community Development Loan Funds.