By now you've probably heard a great deal about mutual funds. So have many investment-minded members of the public. But, while most people may be familiar with the term, they may not know much more about this financial product except that it is a good investment. They may not realize that a mutual fund encompasses much more than just one type of investment.

A mutual fund is comprised of shareholders or partners who join forces to reach a specific investment objective. Their funds are pooled together and invested by professional money managers, who attempt to achieve the stated objectives of the mutual fund.

Usually, a mutual fund belongs to a "family." The same company manages a group of funds, or family, so an investor can switch funds easily and quickly within that family. Each fund within that family has a different investment goal.

The investment purpose of a mutual fund can be found in its prospectus. The prospectus is the legal document, which is usually filed with the Securities and Exchange Commission (SEC), that provides important information about the mutual fund. It is required reading for investors considering any mutual fund.

The prospectus can tell the investor much more than just the investment purpose of the fund. Investors can learn about a fund's management policies, its portfolio, and any fees that are charged. Although it may seem difficult to understand at first glance, it is definitely worth reading. No money should ever change hands until the investor has been given a chance to thoroughly review the prospectus.

When clients invest in a mutual fund, they pay net asset value plus a sales charge, if any. The net asset value represents the total value of the fund's assets, less any debt, and divided by the number of shares outstanding. The net asset value changes constantly and will be calculated on a daily basis.

While most mutual funds operate in this fashion, there are also closed-ended funds. With closed-ended funds, a limited number of shares are sold to investors. Once all these shares have been sold, they can only be purchased from another investor. The price of these shares is based upon supply and demand, rather than in relation to the net asset value.

An open-ended fund will continue to issue shares to any investor who wants them. Since most funds are open-ended, the following material deals with them.

In order to become eligible to sell mutual funds, an agent must be licensed.

In most cases, there are federal and state requirements that must be met. The Securities and Exchange Act of 1934 empowered the National Association of Securities Dealers, Inc. (NASD) to set standards for licensing. The agent who wishes to sell mutual funds must obtain a Series 6 license. To obtain that license, the agent must be sponsored by a securities broker/dealer and must pass a test administered by the NASD.

In addition to the federal requirement, most states have their own securities laws, called "blue sky" laws. More than 30 states also require an additional license to sell mutual funds, which requires passing the Series 63 Uniform Securities Agent State Law Examination.

This is not as difficult as it sounds: The NASD administers both exams and they may be taken on the same day. These exams are administered at locations across the country and use the PLATO system. Agents simply make an appointment at one of these centers and take the exams at their convenience. Unlike college boards or other exams, there is no need to go on a particular day or wait months to take the exams. And with the PLATO system, agents can get the results of their exams immediately.

Although the NASD administers both the state and federal qualification examinations, it does not offer training courses or study materials. It will, however, provide an outline of the topics covered in the exams and the relative importance of each. The NASD also supplies a list of reference materials.

Applicants can continue taking the exams until they pass them. An applicant who fails the exams can immediately apply to take the tests again. There are no training requirements for taking the exams and receiving a license. While no specific training is required to take the exams, agents should certainly be reading and taking courses on investments and financial planning in order to best serve their clients. Agents would also be well-advised to check their Errors & Omissions coverage before embarking on any such venture.

Just as there are a multitude of investment opportunities, so are there a wide variety of mutual funds. While a particular organization may offer dozens of mutual funds, there are basically four different types: money-market funds, stock funds, bond funds, and specialty funds. These categories offer investment opportunities designed to meet the goals of virtually every investor, from the most aggressive to the most conservative.

When looking at these types of mutual funds, it is important to recognize that many are difficult to classify. There is no sharp delineation between some types of funds. Within the category of stock mutual funds, there are additional distinctions, such as the difference between growth and aggressive-growth funds. Practically speaking, the portfolios of these funds may be quite similar. The managers of both funds seek stocks that will appreciate in value. In searching for long-term capital growth, there might not be a distinct difference between the funds.

Even the services that monitor mutual funds find it difficult to classify them. One particular fund may be labeled differently by each of the services since each service uses its own criteria to classify a fund.

Money-market mutual funds are particularly appealing to those investors who need quick access to cash and can't have their money tied up for a long period. Money-market funds are also an excellent short-term investment vehicle.

People often leave their money parked in a passbook savings account at their local bank or savings and loan. These accounts pay low interest, but customers are free to withdraw their money whenever they need it. Money-market mutual funds offer the same feature, but pay a much better rate.

These money-market mutual funds should not be confused with a money-market deposit account that a bank or thrift might offer. Although a deposit account will pay more than a passbook savings account, the rate probably won't be as high as a money-market fund.

Money-market funds can also be used in conjunction with other mutual funds that we will discuss later. Money can be profitably stored in a money-market fund while the investor considers other investment opportunities. In times of economic uncertainty or to take advantage of high interest rates, investors can use the money-market fund as a place to put their nest egg until other investment vehicles become more attractive.

Money-market fund managers invest in Treasury or other government securities, short-term bank deposits, or commercial paper. Investors might get a better rate of return at a bank or savings and loan by buying a certificate of deposit, but they would not be able to withdraw their money at any time, as they can with money-market funds. Money-market funds let investors get the certificate of deposit rates they want without losing immediate access to their money.

Although money-market funds aren't federally insured, they are considered quite safe. The prospectus can tell investors a lot about how safe their money will be. If the money-market fund invests primarily in securities issued or is guaranteed by the U.S. government, there is almost no risk. A fund that puts a large percentage of its assets into commercial paper might be slightly riskier. Commercial paper includes short-term, unsecured promissory notes from corporations to finance short-term credit needs. Once investors are satisfied with the safety of the fund, they will likely look at more mundane criteria to determine their choice. For example, if they are going to use the fund as a checking account, they will want to know how many checks they are allowed to write per month and the charge for each check.

A money-market fund is a good place to keep a family's emergency fund. Most financial planners recommend that investors put aside a nest egg of three to six months' salary to meet emergency expenses. And, since with a money-market fund the net asset value is always $1, the interest earned simply buys more shares in the fund.

Some investors want to do more than earn interest on their cash. There are stock mutual funds for investors who wants to put money in the stock market without taking inordinate risks. Unless investors possess a great deal of knowledge about individual stocks and are willing to closely monitor their holdings, they are usually better off in a stock fund, which will give them a professionally managed, diversified portfolio.

When playing the stock market, investors have to choose their course of action. Do they want solid blue chip stocks or do they prefer to speculate on volatile issues with greater potential for growth? Are they looking for a stock with a high dividend payout, or one that will use its earnings to finance future expansion? When choosing a stock fund, investors are faced with similar decisions. There are four different types of stock funds:

Equity Income Funds-The manager of the equity income fund is concerned with generating a steady income for investors. He or she will select a portfolio composed primarily of stocks that pay high dividends. The manager of the fund is on the lookout for stocks with high yields and is less concerned about whether those stocks will appreciate in value. Part of the portfolio is invested in bonds.

There may be a reference simply to income funds. An equity income fund emphasizes income from stock dividends, while a bond fund is an income fund in which the portfolio consists primarily of bonds.

Growth Funds-While the manager of an equity income fund is determined to pick stocks with high yields, the manager of a growth fund is seeking capital appreciation. The portfolio of a growth fund consists of stocks with a potential for capital gains. Current earnings are not as important, as long as the future prospects of the stock are bright.

Growth-and-Income Funds-In addition to growth-and-income funds, there are hybrid categories. Some stock funds shoot for a mixture of both growth and income. The growth-and-income fund manager selects a portfolio of stocks with the potential for growth, without sacrificing current dividends. Investors in such a fund expect some current income, but also count on a longterm appreciation of their capital.

Once again, it is important to note that some funds are difficult to classify. You may hear "balanced funds" mentioned. In some cases, a balanced fund is very similar to a growth-and-income fund. Its portfolio is a balanced mixture of both stocks and bonds. Although the goal of a balanced fund is to preserve the principal while paying current income, it also seeks long-term growth of the principal. There will be times when a balanced fund and a growth-and-income fund have the same mixture of securities in their portfolios.

Aggressive-Growth Fund-Another hybrid category is the aggressive-growth fund. Stock funds of this type are designed for risk-takers who can afford to speculate on the market. Investors in this type of fund should be prepared to lose some of their investment. In exchange for this risk, they might receive an outstanding return on their investment. Aggressive-growth funds are not for conservative investors who can't deal with significant fluctuations in the value of their investment.

This type of fund is sometimes called a maximum capital gains fund, or a capital appreciation fund. No matter what it's called, the fund manager can be expected to pursue a more risky trading strategy than usual. The portfolio will be turned over frequently to meet this investment objective.

The aggressive-growth fund manager is searching for stocks that have the potential for rapid growth, and he or she will take aggressive steps to increase the value of these stocks. Because these stocks can be volatile, there is far more risk than with the growth fund.

Because of this risk, the investor should pay particular attention to the prospectus sent by the fund. It will clearly state the fund's objectives and will outline the types of stocks that have been and will be purchased. The goals of the fund should be compatible with the investor's reasons for investing.

Investors who are dissatisfied with the yield on money-market funds might view bond funds as an attractive alternative. Unlike money-market funds, however, the net asset value of bond funds can fluctuate. Although bond fund investors are striving for current income and safety, the principal is at risk due to possible changes in the interest rate.

Equity income funds rely primarily on stock dividends to generate income. Bond funds, as the name implies, emphasize bonds in their portfolios to provide income to investors. The risk associated with bond funds varies, depending on the types of bonds utilized in the portfolio.

The prospectus will warn investors of a potential problem. It might say that the fund invests in lower-quality bonds that are subject to greater risk. This could mean that the fund will invest in "junk bonds," which are extremely risky.

To understand mutual funds of this kind, it is helpful to understand the distinction between taxable bond funds and tax-free bond funds.

Taxable Bond Funds-This type of bond fund invests in corporate bonds and other fixed-income securities. A corporate bond is a security that represents a debt owed by the corporation. The interest rate will be dependent upon the size and financial strength of that corporation, among other factors. Riskier bonds will pay a higher interest rate. The value of the bond fund's portfolio depends on where interest rates are headed, the maturity dates of the bonds, and how risky those bonds are in view of current economic conditions.

Government bond funds also fit into this category. Although these funds only invest in securities issued by the U.S. government and its agencies, they can still be risky. The value of the shares in a government bond fund can rise or fall in relation to fluctuations in interest rates.

Investors can even buy shares in a bond fund that only invests in securities issued by the Government National Mortgage Association, or Ginnie Mae, as the federal agency is often called. As is the case with other government bonds, fluctuations in the interest rate can cause a decline in the investor's principal.

The interest on government bond funds is subject to federal taxation. In general, however, it will be free of state and local taxes.

Tax-Free Bond Funds-The tax-free bond fund invests in municipal bonds issued by cities, states, and other governmental entities. The income from these funds will be free from federal income taxes. As a general rule, only individuals in a high tax bracket would benefit from a tax-free bond fund, since the tax savings on this income offsets the lower interest rate that is usually paid.

Within a family of funds, there might be more than one kind of tax-free bond fund. One type will utilize only high-quality municipal bonds; another might use only insured municipal bonds. While insurance will guarantee payment of the interest and principal, the value of the bonds in the portfolio can still fluctuate.

There are even some tax-free bond funds that are geared to investors from one particular state. The portfolio is arranged so that the income is also free from state and local taxes.

A tax-free bond fund can eliminate some of the risk associated with buying municipal bonds. The manager of the fund can weed out risky new issues that might default. In addition, the diversity of municipal bonds found in a tax-exempt fund reduces the risk from default.

Depending upon their tax bracket, investors might be attracted to a municipal bond fund as the income from these bonds is not included in an investor's taxable income.

There would seem to be a mutual fund to cover any and all investment objectives. Specialty funds have been created to exploit specific investment opportunities and to achieve certain financial objectives. Obviously, there are unique risks associated with these specialty funds. These funds require sophistication and financial expertise to truly understand the dangers they present.

Gold Funds-This type of fund invests in gold mining stocks, gold coins, or bullion. Some of these gold funds are even more specific in their objectives. For example, they might only invest in stocks from a particular geographic area, such as Canada or Australia.

Convertible Funds-This fund invests predominantly in convertible bonds and convertible preferred shares of stock.

Foreign Funds-Funds of this variety only invest in foreign stocks.

Index Funds-An index fund's portfolio will consist of the stocks in a major market indicator, such as the Dow Jones Industrial Average or Standard & Poor's 500. In this way, it keeps pace with the direction of the market. The investor in an index fund will usually profit when there is a bull market.

Option-Income Funds-The managers of this fund write covered options on a majority of the portfolio.

Sector Funds-These funds invest in a single industry or market sector.

There is less diversity and more risk with this type of fund.

Social-Action Funds-These funds are for people who want their investments to be consistent with their political beliefs. Funds of this kind will refrain from certain investments for political or social reasons.

Mutual funds offer many advantages, especially to the small investor. There are funds that can help investors achieve either their short-term or long-term financial goals and, ultimately, financial security.

Even if they had the expertise, most people are too busy to research and investigate all of the investment opportunities available. The manager of a mutual fund performs this service on a fulltime basis. That manager and the employees of the fund have access to data that is unavailable to the individual investor.

The concept of diversification is touted by almost every financial planner and every consumer magazine. For a small investor, buying 100 shares of a $50 stock is an expensive proposition. The creation of a diversified portfolio with several quality stocks would take more investment capital than most people can afford. A mutual fund lets the investor diversify without spending too much money. The purchaser of mutual fund shares buys a truly diversified portfolio, selected by a trained specialist operating within the parameters set forth in the prospectus. Some experts have advised that unless you have $100,000 to invest, you should stick with a mutual fund. Some funds hold over 1,000 different stocks and most have at least 100.

Investors in mutual funds will have easy and quick access to their money. Many funds offer check-writing privileges and let investors switch funds at will. The open-ended fund will redeem shares at any time and will pay the net asset value of the shares.

Investors can use the flexibility and convenience of mutual funds to their advantage. As their investment objectives change, they can select a different fund with an investment portfolio that more closely matches their new goals. Changing economic conditions might also prompt a change in someone's portfolio. Mutual funds allow investors to react quickly to those changes. When stock fund investors believe a bull market is coming to an end, they can transfer their money to a different investment vehicle.

Mutual funds can be an excellent investment vehicle for both large and small investors. The minimum amount that must be invested varies from fund to fund, but can be as low as $50. After the initial deposit, investors can then use a periodic investment strategy to reduce their risk and increase their chances of building a sizable nest egg.

This investment strategy is recommended by many experts and works extremely well with mutual fund purchases. With dollar-cost averaging, an investor can accumulate shares in a mutual fund without the risk of buying shares at their highest price. The same amount of money is invested at regular intervals. The investment buys more shares when the price is low and fewer shares when the price is high. It is a systematic investment program.

The investor who utilizes this strategy will buy shares at an average price, which is less than the average market price. Because the investor is committing the same amount at fixed intervals, he or she will not purchase too many shares when the price is high.

Dollar-cost averaging helps the mutual fund investor avoid buying shares at the wrong time. It is a long-term investment strategy requiring that shares be bought at regular intervals on a continuing basis. An automatic transfer from a checking account to the fund can be arranged to implement this dollar-cost averaging strategy.

Mutual funds can remove some of the hassles of investing. For instance, participants in a money-market fund need not worry about certificates of deposit due dates. Similarly, stock mutual fund investors would get one statement rather than having to keep track of individual securities. Mutual funds also make it easy to reinvest dividends and capital gains.

The primary drawback to some mutual funds is the load, or sales charge. It is normally a frontended charge of 8 1/2% or less. Although the sales commission on the fund might seem unappealing, it is not much different from a typical purchase, or stock sale where a broker's fee is paid.

Some funds are classified as "low-load" or "no-load." The low-load fund will usually have a sales charge of 2% to 4%. The no-load fund has no front-ended sales charge. The shares are purchased directly from the management of the fund.

Even the so-called no-load funds may charge other fees. The mutual fund may have a backended load, which is charged when the shares are cashed in. No-load simply means there is no initial sales charge.

Every fund will charge a management fee of some kind. There might also be a charge for accounting fees and marketing costs, which are usually included in the expense ratio. The expense ratio represents the amount assessed against the fund's assets for these expenses.

A typical fund might have an expense ratio of 1%, which means that $1 is charged for each $100 of assets. An exceptionally high expense ratio of 2% could end up costing more over the years than a front-ended load of 8 1/2%. The fund's expense ratio can be found in Part B of a prospectus.

Investors should also look for 12b-1 fees, which can increase a fund's expense ratio. These fees get their name from the Securities and Exchange Commission ruling that permitted them.

The agent's commission comes out of either the front-ended load or the back-ended load. Depending upon the broker/dealer you're dealing with, the commission structure will vary. Obviously, the agent does not receive the full load, however it is collected.

To take an example, an investor puts $10,000 into a stock fund that has a load of 4%. The agent may only get 40% of the $400 commission, or $160. Selling agents, however, may get as much as 80% of the commission, or $320.

Money-market funds are no-load in almost all cases. There might, however, be a service charge that reduces the investor's yield on smaller accounts. Although the agent will probably not receive a commission when a client invests in a money-market account, investment might lead to other opportunities in the future. It also lets the agent provide a full range of services to the client, along with meeting the individual's insurance needs.

Therein, however, lies the greatest danger of selling mutual funds to a client: it may jeopardize your relationship with that person. Clients may not be happy with the performance of their investments. If they feel you are not as knowledgeable as you should be in the investment area, it could affect their trust in your insurance recommendations. The fluctuations in the value of a mutual fund account may also cause ill will between you and a client.

There are thousands of mutual funds from which to choose. In choosing a mutual fund, it's important to know the temperament of the investor. The fund must be suited to the financial objectives of the person investing. For example, someone seeking long-term capital growth would need a different fund from the person who is looking for immediate income.

The goals of a fund can be found in its prospectus. The purpose of the prospectus is to give investors enough information so that they can make an intelligent decision before turning over money to the fund. When you have narrowed down your decision to three or four funds, you should then scrutinize the prospectus for each.

You should be on the lookout for red flags in the prospectus. Be especially wary if the prospectus mentions regulatory reviews or pending lawsuits. Look for a disclaimer clause that will emphasize the major risk of investing in that fund.

Rather than looking for one fund in particular, you should be looking for a company that offers a large family of mutual funds. In all likelihood, investors' needs and goals will change over the course of their lifetime. Having a large family of funds from which to choose will allow investors to change investments quickly to meet those new objectives.

You should also be looking for a fund with an excellent long-term track record. Many publications, such as Money Magazine, Kiplinger's, and Forbes, rate mutual funds on a regular basis. They will rank the funds according to their short-and long-term performance.

You can also find out a fund's ranking according to Lipper Analytical Services, Inc. This is an independent service that ranks funds of similar size and with similar objectives. Lipper Analytical Services monitors the performance of mutual funds.

For an in-depth analysis of many funds, you can read the Standard & Poor's/Lipper Mutual Fund ProFiles Universe, which is available at business libraries. This book will supply an enormous amount of information about a mutual fund. Among other data, it gives an annualized rate of return for a one-, five-, and 10-year period if available. You can learn about the volatility of the fund and how it performs during specific market cycles. And Morningstar rates mutual funds on the Internet.

Unfortunately, past performance is not always indicative of how a fund will perform in the future. The fund manager responsible for that success may no longer manage the fund. Long-term performance is, nonetheless, a sign that a fund has shown consistent results during adverse economic cycles.

While these are very important elements in the decision-making process, they are not the only factors to consider. You should also be looking at service for both you and your clients. You can get a preview of a company's customer service capabilities by calling its toll-free service number. If the representatives are unable to answer your questions, or if the lines are always busy, there's a good chance your clients won't be satisfied with the service they get from the mutual fund.

Examine the fund's expense ratio. A low expense ratio can bring a greater return for your client.

Look for a fund that doesn't charge a commission each time dividends and capital gains are reinvested. Only a few funds do this. Directing a client to a fund of this kind is a disservice and could antagonize the investor.

Statistics show that there is a growing market for mutual funds. In addition, it is clear that many people are familiar with the attractiveness of mutual funds. This means you won't need to educate many potential buyers about the nature and purpose of mutual funds. Unlike the case with many insurance products, consumers have an understanding of mutual funds, and there is unlikely to be as much resistance as there is to some policies.

The following ideas can help you target mutual funds to the aforementioned prospects:

REMARKS: This letter can be sent to current Personal Lines customers to let them know you can handle their investment needs in addition to their insurance program. Be sure to clear all printed materials with your broker/dealer before using them!

Dear [NAME]:

Have headlines like this scared you off from investing in the stock market? Many people are more wary about where they put their money, but too often they err on the side of safety, putting their money in low-interest-bearing savings accounts.

There is another way: mutual funds. Mutual funds can provide you with higher interest rates and are a safer investment because they are made up of a group of shareholders whose funds are pooled together and invested in a number of things. A professional money manager handles the day-to-day management of your mutual fund, assuring investors of top-quality care.

As your professional insurance agents, we also specialize in this type of investment. We want to be your resource for both insurance and investments. Just as we handle your Personal coverages, so can we take care of your personal investment needs.

We're federally licensed to sell mutual funds, and we've got the knowledge to find the one that's right for you. You might want easy access to your money. We can find a mutual fund for you that offers check-writing capabilities. You may want a long-term, stable investment for your retirement needs. There's a mutual fund for that, too. Just give us a call to learn more about our mutual fund program.

Sincerely,

[AGENT NAME]

REMARKS: This letter can be sent to your Commercial Lines customers to let them know you also handle investments in addition to insurance.

Dear [NAME]:

We want to take this opportunity to thank you for your business over the years. You've been a valued client of our agency, and we certainly appreciate your patronage.

We would also like to let you know about an investment program we have here. Several of our staff have obtained the Series 6 license to sell mutual funds. This means that we can handle your investment needs as well as your insurance plan.

As you know, mutual funds can provide you with higher interest rates and are a safer investment. Because mutual funds are made up of a group of shareholders whose funds are pooled together and invested in a number of things, you can be assured of professional advice and management.

Also, we have mutual funds to meet every need-from easy-access funds that offer check-writing capabilities to long-term funds. We'd be happy to explain more about our mutual funds. Just give us a call!

Sincerely,

[AGENT NAME]

REMARKS: Send this letter to those customers and prospects with discretionary income. For example, target a list of luxury home buyers obtained through a real estate broker relationship.

Dear [NAME]:

When you have money that needs to be invested, where do you turn? Banks and savings and loans offer low interest rates-and federal insurance covers funds only up to $100,000. The stock market is tricky for those who can't spend a lot of time studying stocks and market fluctuations. And many investors have a hard time creating a diversified investment plan.

That's where mutual funds fit in. Mutual funds are a diversified, professionally managed way to invest your funds. As licensed agents, we can direct you to the mutual fund that best serves your needs. For example, you can create a college fund for your child with mutual funds. Or you can plan for your retirement. You can even invest in a mutual fund that invests only in those political or social causes in which you believe.

In short, mutual funds are the answer to all your investment questions. We can work with you to come up with the fund that's just right for your needs. If you want easy access to your money, you can have it. If you want an aggressive investment program, an aggressive-growth mutual fund is what you need. Just send in the enclosed reply card, and we'll set up an appointment.

Sincerely,

[AGENT NAME]

Enclosure

[ ] Yes! Please tell me more about mutual funds. I understand there's one for my needs.

Name:________________________________________________________________________

Address:______________________________________________________________________

City/State/ZIP:_________________________________________________________________

Phone:(_____)_________________________________________________________________

Best time to call:_______________________________________________________________

REMARKS: Target your Whole Life, Universal Life, and Single-Premium Whole Life insureds. These people tend to be more financially sophisticated and should therefore be more interested in mutual funds.

Dear [NAME]:

HOW CAN I SAFELY INVEST MY MONEY?

WHERE CAN I GET THE HIGHEST RETURN FOR MY DOLLAR?

These are questions everyone asks. After a particularly big drop in the stock market, or following the collapse of a large savings and loan, many investors are very concerned about the safety of their investments. On the other hand, many other investors want a high yield and are willing to take risks.

Mutual funds are the answer for both types of investors. Because there are so many kinds of mutual funds, we have one just for you. If your money's safety is important, we have tax-free bond funds that are guaranteed by insurance. Aggressive-growth funds are designed for risktakers who are willing to gamble in return for the chance of high yields.

Whichever type of investor you are, we can find a mutual fund that's right for you. We'd be happy to schedule a no-obligation meeting to analyze your investment needs. Just give us a call, or fill out and send in the enclosed reply card.

Sincerely,

[AGENT NAME]

Enclosure

[ ] Yes! I'm interested in meeting with you about my investment needs.

Name:________________________________________________________________________

Address:______________________________________________________________________

City/State/ZIP:_________________________________________________________________

Phone:(_____)_________________________________________________________________

Best time to call:_______________________________________________________________

REMARKS: Send your Personal Lines prospects and customers this letter, which emphasizes that it's never too soon to start investing for the future.

Dear [NAME]:

Are you ready to start planning for your retirement? Do you have children you want to send to college? Have you been thinking about building up a next egg for a rainy day? What are you waiting for?

We understand how easy it is to put off the creation of a savings vehicle. But it's so important to begin investing your money, we'd like to suggest something that may help: mutual funds. You can put in as little as $1,000 and receive a diversified, stable investment in a mutual fund.

We realize that as a small investor, it's difficult to create a diversified investment on your own. We also know that you want a safe way of investing your money while still earning higher interest rates than those offered by banks and savings and loans. We can find the investment tool that's right for you from our variety of mutual funds.

Just give us a call today and we can tell you more about the mutual funds we offer. We have a licensed agent on the premises who would be happy to review your investment needs.

Sincerely,

[AGENCY NAME]

Dear [NAME]:

WE'RE OFFERING A FREE FINANCIAL REVIEW!

No strings attached! For a limited time, we're offering a free financial review to you. We realize that the financial climate is rocky. The junk bond frenzy has come and gone. Savings and loans collapses continue to make headlines. The stock market continues to frighten many potential investors.

We can help you navigate this risky world of investments. One of our products, mutual funds, can help you steer through the hazards of investing. Mutual funds can provide you with higher interest rates and are a safer investment, because they are made up of a group of shareholders whose funds are pooled together and invested in a variety of stocks.

We have mutual funds to meet every need: If your money's safety is important, we have tax-free bond funds that are guaranteed by insurance. Aggressive-growth funds are available for risktakers who are willing to accept risk in return for the chance of high yields.

Don't wait! Return the enclosed reply card to set up your free insurance review. We'll be happy to meet with you!

Sincerely,

[AGENT NAME]

Enclosure