When Warren Carnel started Cardinal Associates Inc., a manufacturers'-representative firm in Burbank, Calif., the fine points of financial planning weren't always the most important items on his mind. More pressing was the need to find money to pay his 8 or 10 salespeople, all of whom were running up expenses and taking a draw against eventual commissions. Like a lot of small manufacturers' agents, Carnel found the commission checks were slow to come in. Realizing he had to retrench, he fired his sales force and cut back on the number of companies his firm was representing.

That was several years ago, and it was undoubtedly the turning point for Carnel's company. Cardinal now does several million dollars' worth of business a year throughout southern California, selling electronic equipment to the aerospace and computer industries.

The turning point in his own financial affairs, however, may have come a few years earlier, when Cardinal Associates was still a gleam in Carnel's eye. Sales manager for an electromechanical company, he noticed the names of two old high-school buddies on a sign advertising financial planning. He called up the pair, Gus and Walter Hansch, and visited their Los Angeles office to talk over his concerns.

"My main interest was to get away from making decisions among competing salesmen," Carnel remembers. "I'd be talking to these brokers and insurance agents who would say different things about what to do with my money. The Hansches just said, 'Let us package a program for you.' "

Carnel began to meet regularly with Walter Hansch and others at Hansch Financial Group and to follow their suggestions about investments, insurance, and other matters. The Hansches also encouraged him to start his own business, an idea he had been toying with for years.

When he did, his financial problems immediately grew more complex. "Business owners cannot and should not keep their personal and their company's finances separate," Gus Hansch says, and most financial planners agree.

Where Carnel was concerned, for example, Hansch Financial's first step was to set up a defined-benefit pension plan for his company. That allowed before-tax dollars to be channeled into a pension trust, most of which would eventually redound to the company owner's benefit. "It gave him 80 cents on the dollar to invest instead of the 50 cents on the dollar he would have received in aftertax salary," Walter Hansch explains. "All the investments compound tax-free until he retires, which makes a big difference over time. Even then, he gets preferential tax treatment."

Hansch and Carnel channeled most of the pension fund money into stocks. Their choices were not always perfect, particularly since they had to survive the bear market of the early 1970s. "I bought Mattel at $29 and watched it drop to $14," Carnel remembers. "I was glad to get out." Still, a lot of investments paid off. As a manufacturers' rep, Carnel gets inside a lot of plants, and he will often suggest that the Hansches buy stock for the pension fund in companies that look promising from this perspective.

Meanwhile, Carnel was investing heavily in real estate on his own, often through deals set up with Hansch Financial's help. He borrowed $100,000 against the increased equity in his house and put the money into a 34-unit apartment building, getting 51% ownership. He bought into an office building in South Laguna, Calif., and into some business condominiums along Laguna Coast Highway. These investments, plus a limited partnership in a Texas oil-and-gas venture, allowed him to shelter a good part of his income. Gus Hansch notes, however, that each real-estate venture had to be financially sound on its own terms to pass the firm's scrutiny. "We never recommend a tax-oriented investment that doesn't stand on its own feet," he says.

Carnel now 59 will probably retire in a few years which in turn will mean some changes in his investment portfolio. "We'll soon begin to convert that tax-shelter real estate into some income-producing real estate," says Walter Hansch, noting that Carnel could acquire interests in, say, shopping centers as part of a tax-free exchange. Hansch also plans to buy a variable annuity for Carnel's pension plan, thus providing him with a regular income from the plan's investments.

In recent years, Carnel has turned to more speculative ventures, without advice from the Hansches. One is a Mexican silver mine that he says is capable of producing 100 ounces of silver per ton of ore, as compared to an average of 5 ounces per ton from U.S. mines. That looked fine until the Mexican government clamped down on the export of capital from the country. Now Carnel owns a lot of silver ore worth a lot of pesos, but he can't convert these assets into dollars. Hansch, he hopes, may be able to come up with a solution, such as a swap of silver ore for some Mexican beachfront properties.

Carnel hooked up with Hansch Financial early on, before the firm began charging a fee for its services. As a result, he paid only the commissions and placement charges Hansch earned on the various investments it sold to him. Now, Gus Hansch says, the firm charges on a fee-and-commission basis. A client in Carnel's situation could expect to pay $500 to $1,200 for an initial plan, plus a yearly monitoring fee of roughly $100.

If Carnel's story is any guide, the relationship between financial planner and client is likely to change over time. Carnel meets with Gus or Walter Hansch once or twice a year to review his entire situation, and may talk to one or the other every couple of weeks over a cup of coffee. But where the Hansches used to take the lead in proposing programs, now they often react to Carnel's ideas.

That, to Carnel, doesn't make the finiancial planners less useful by any means. "I have a tendency to run off and do something crazy," he chuckles. "They temper me."