Customers are constantly asking bankers - especially community bankers - for help with investments.

You, as bankers, well know that you cannot give advice on what to buy or what and when to sell.

I here are two awfully good reasons for this:

First, you have no more certainty than anyone else. And second, you are not legally allowed to do this because you are not a registered investment adviser.

Still, you can't turn the customer away empty-handed. You must offer some advice of value.

So the editors of the American Banker have given me the opportunity to present two columns back to back - today and tomorrow - giving some ideas of what you can tell your customer that will be useful and that can be presented with the certainty that it will be appreciated.

What are some of these safe but helpful tenets?

* Remember TINSTAAFL. The most important advice a banker can give the potential investor is to remember TINSTAAFL - the initials for "There is no such thing as a free lunch."

Every investment offers a combination of safety, income, and liquidity (the ability to get your money back without undue loss.) If you want income and liquidity, you must accept risk that is greater than if you will accept a lower return. And if you want liquidity, you also must accept a lower return. You can't have it all.

* Don't think you are smarter than everyone else. If a broker, friend, or adviser tells you this investment is far better than everyone else thinks, and you are getting a great deal, ask yourself, Why am I so lucky and smart that I am getting it instead of someone else? Only if you can answer that positively should you plunge.

* Be wary of cold calls. It is generally a good idea to warn bank customers against any investment advice from people they don't know.

If it looks like a marvelous scheme, or the caller says you are getting in on the ground floor, ask yourself, If it's so good, why is he offering it to me? He never heard of me before; he just bought my name on a list.

We all read about IPOs - initial public offerings of stock that can jump in price immediately. We also know they are impossible for the investor to obtain unless he has a long and strong relationship with the issuer. Keeping that in mind, ask your customer what he should think about an IPO that is being offered cold to a stranger.

Don't borrow to invest. Even though bankers make their money by lending, virtually all agree that the best move most people can make is to pay off their debts. It is difficult to find an investment that earns as much as people pay to borrow money, so if you have debts, reducing them is the best return available.

Conversely, if someone tells you to borrow for a beautiful opportunity, the sheer relationship between what individuals pay to borrow and what they earn on most investments make the idea a bad one.

* Study the tax consequences. When someone tells your customer that an investment doesn't cost much because "it's tax deductible" if you borrow the money for it properly, you have two answers available.

First, this may involve fraud if money is borrowed, say, on a home equity loan and then is used for the investment instead of other purposes,

Second, even if the investment is tax deductible, the income earned on it is taxable, so it becomes a wash. Advisers always remind us of the deductibility of the loan but not of the tax liability the investment generates.

In this regard, a banker can explain to his customer how taxexempt state and municipal bonds work and how they must compare the after-tax income of a taxable investment with the tax-free income on the municipal to see which is superior for his or her tax bracket.

I hope these are useful ideas for how to advise your customers. Tomorrow we will have more.

Mr. Nadler is a contributing editor of American Banker and professor of finance at the Rutgers University Graduate School of Management

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