Now in her third year of running a financial planning education business, Liz Davidson has seen a change in the attitude of investors who attend her company's workshops.

Pin it on the Enron collapse, or the sluggish economy, or even September 11. Whatever the reason, Davidson says, investors are seeking better advice on how to run their finances. And their employers are more eager to help them get it. In other words, she says, the average 401(k) participant now is willing to admit that maybe, just maybe, financial advisors have more to offer than the talkative next-door neighbor.

"That's a very common mistake-turning to people who aren't professionals at all and taking their advice blindly," Davidson says. "Now, after some of the recent things that have happened, they're starting to realize it just puts them in potential trouble."

Davidson, meanwhile, is an example of how turmoil in the investment world, and the world in general, may be creating more opportunities for financial advisors. Her San Francisco-based business, Financial Finesse, specializes in providing companies with a third-party solution when it comes to providing employees with financial planning help.

The company uses a four-pronged approach to education. It has a telephone help line that employees can use for basic financial planning advice and to get referrals to advisors. Online and turnkey "learning modules" are also part of the company's offerings.

But the company's signature service, and the one driving growth recently, is an assortment of multimedia financial workshops run at the location of a client company, typically before an audience of about 30 employees. Financial Finesse develops the workshops, which are then presented by financial advisors affiliated with the company. The topics range from basic financial planning to more focused presentations on investing, retirement planning, stock options and tax planning.

Lately, Davidson says companies and employees have been gobbling up such information. The company expects to put on 250 such workshops this year-a huge jump from the 25 that were conducted last year. She attributes at least some of the increase to the unease that the Enron collapse has caused among corporations and employees.

For companies, the fears center on liability in cases where something does go terribly wrong. For employees, it's the realization that a passive approach to retirement planning and 401(k) management is a lot more perilous than they imagined. "I just think in general, companies realize they need to be proactive," she says. "It's too late when everything has collapsed."

The Last Straw

Tom Swift, one of the advisors who runs Financial Finesse workshops for corporate clients, says he's seen a visible change in investors over the past year. "The one thing we're seeing, at least in our practice and through presentations, is a greater focus and a greater concern over what's going on in their 401(k)s," says Swift, CEO and co-founder of Financial Avengers Inc. in San Francisco.

He thinks it's more than just a backlash to Enron. It really started a couple of years ago, he says, when many investors saw their Shangri-La market come tumbling down. There was the Internet bubble and the crash of Nasdaq stocks. The September 11 attacks. The recession and the continued doubts about the economy.

"Enron was the last straw in a two-year series of events," he says.

Investors could no longer sit back and watch their money grow. Indeed, they came to the realization that they had to actively manage their money or risk serious losses. "I'm just finding more and more clients are saying, 'I need help, and I don't want to bear full responsibility anymore,'" Swift says.

Given the fact that 2000 and 2001 were the first years in which total 401(k) assets shrank, many are not surprised that there's a sense of urgency among employees on a retirement track. Ylisa Sanford Seymour, an advisor with offices in San Francisco and Santa Rosa, Calif., has done about four workshops for Financial Finesse this year. The most notable change she has seen in attendees: "People are much more receptive to advice," she says.

That in large part is due to the fact that so many 401(k) participants failed to diversify and were overweighted in large-cap growth funds. It's not that people weren't following the advice of advisors, she adds. But that's because they didn't seek advice. People got used to managing their accounts on their own, and doing it successfully-naÔve to what could happen when the market turned. "For the majority of people I see in these workshops, I would say it's the first time they've sat down with a professional," she says.

Swift, meanwhile, says workers are so jittery they're pouring more and more of their 401(k) savings into money markets. Based on what he's seen at workshops, it's common to see 35% to 100% of 401(k) assets sitting in money-market accounts. "They've become so scared of the market that they've capitulated," he says.

Other common mistakes are employees relying too heavily on large-cap funds and having too high a percentage of assets in the form of stock options, Swift says. Overweighting in a single sector-usually the sector in which the employee works-is another habit workers fall into, he says.

At workshops, Swift finds that he often has to start from the ground up. "With all the information that's available with the technology boom and the information age, I'm still amazed that I can sit in front of 25 people and nobody has ever told them how dollar cost averaging works," he says.

Increased concern about 401(k)s, and investing in general, is a main reason InfoWorld, a weekly technology magazine in San Mateo, Calif., has held several Financial Finesse workshops over the past year, says Michelle Burnham, the company's vice president of human resources. About 45 of the company's 150 workers participated, she says. "These were people who wanted to understand mutual funds and investments," she says. "We even had new employees from startups that had gone under."

Untapped Market

Financial Finesse was originally founded with the idea of providing financial education to women. It wasn't until women started bringing their husbands and boyfriends that Davidson discovered the demand for financial advice was broad-based.

"I quickly realized that this wasn't just an issue of what women needed," Davidson says.

Davidson, 30, graduated with a business degree from UCLA and got her start working marketing and sales for a hedge fund. The seeds of Financial Finesse were sewn when Davidson noticed how few women attended the investment conferences in which she participated.

Thereafter, she did financial planning seminars as a side business. Six months later, she left the hedge fund and made a full commitment to the seminar business, creating Financial Finesse in June 1999.

At first, she relied on contacts from her business school to muster audiences for workshops she would hold in either her office or at hotels. Her audience would typically number from 10 to 15, but occasionally drew up to 40 people. The turning point in the business came after just a few months, when Davidson was approached by several human resources managers and asked to put on a workshop at their companies.

The requests turned into a company strategy. By focusing solely on workshops held for companies, at company facilities, Financial Finesse was able to get rid of the logistical headaches of paying for and scheduling a hotel conference room and advertising the event. Now, the sluggish market and economy, and Enron, have combined to make the strategy even more successful, Davidson says.

"With the corporate environment today, I don't need to use the same type of sales pitch," she says.

The company, which has 31 employees, currently relies on a pool of 20 advisors to conduct its workshops. Workshops run about two hours, followed by one-on-one sessions between the presenter and attendees.

About 15% of attendees, on average, end up signing on as clients with the presenter, Davidson says.

The company also has 170 planners who are used as referrals for people who call the help line. Financial Finesse made about 225 referrals last year, says Jennifer Ridley Hanson, the company's director of financial planning. Advisors pay an annual fee of $2,500 to be part of the company's advisor network.

All the planners affiliated with the company have between 12 and 15 years working experience and are a mix of fee-only, fee-based and commission advisors. "We like planners who do hourly or have an option for hourly fees," Hanson says. "But it's more about the individual ... Any fee structure has its positives and negatives."

Advisors Prospering

Others attest to the fact that the down market and economy have increased the demand for advisors' expertise. Lou Stanasolovich, CEO and president of Legend Financial Advisors Inc. in Pittsburgh, says revenues are up 25% since July.

"I think with a bad market, there's a realization by many people that they can't do it on their own-that they were kidding themselves when they could," he says. Enron, he says, has actually been a boon to advisors who preach diversification to their clients.

"What I do see is the ability to go back to clients and say, 'Look, it happened in the Internet boom, the tech stock boom, and now it's happened on a single-company basis. Here are three good examples of why you shouldn't have a large chunk of money in one stock,'" Stanasolovich says.

But although his firm also has dabbled at putting on financial planning seminars in the workplace, he says employees are not always the problem when it comes to sloppy retirement planning. One huge hurdle that not even a seminar can overcome is the fact that many companies don't provide their employees with enough investment choices in their 401(k) plans.

All too often, he says, a company will seek a 401(k) that's cheap and easy to administer. The result: a list of fund options that's dominated by large-cap, index and growth funds, with maybe a smattering of bond, small-cap and value funds.

"In many cases, it's a matter of how skinny the employer can get the administrative costs down to," he says. This is one reason Legend now usually declines doing company seminars. "What am I supposed to do? Say, 'Hey employees, your employer is putting you guys out into the wind here with lousy investment options?'"

Another problem is that, even after Enron's collapse, employees continue to pour too many of their assets into company stocks or stocks related to the business in which they work, says Louis Kokernak, principal of LLSK Associates in Austin, Texas.

"I've seen people that have 30% to 60% in penny stocks or tech stocks. That's probably the most serious problem," he says.

Swift, of Financial Avengers, says getting a client to shed such holdings can be difficult, particularly if the company's share price is holding up well. "But more and more people are getting the message one way or another," he says. "This is Silicon Valley. We have five companies that are bankrupt for every one doing well."

Yet even though Swift repeatedly advises clients to diversify, and he preaches it passionately in the Financial Finesse workshops he runs, he doesn't agree with proposals to regulate the percentage of 401(k) assets people can have tied to their company's stock.

The reason: He feels people should be allowed to take that gamble if that's what they choose to do. "After Enron, you probably should regulate it. But then I say, gee, there's a reason there are so many millionaires in Seattle. It's because they all worked for Microsoft and were completely connected to the company's stock," he says. "It's a very tough one."