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Aiming online money tips at middle-income investors

Financial planning services, once the purview of the wealthy, are going mainstream--at least, that's what one start-up is banking on.

Financial planning services, once the purview of the wealthy, are going mainstream.

At least, that's what AdviceAmerica.com is banking on. The 15-month-old start-up launched a Web site today to give people a low-cost and easy way to plan for their retirement, save for a new home, and prepare their taxes.

"Most Americans can't afford financial advisers, which generally charge 1 percent to 2 percent fees of their assets," said Purna Pareek, chief executive of AdviceAmerica.

"But those people can come to our site and for less than $100 a year can get the benefits of a financial adviser," he said. "We help middle-class America by offering a service that's affordable."

Illustrating an opening in this market, analysts predict that a large number of middle-income consumers will increasingly begin trading securities online. The number of households involved in trading having annual incomes of between $30,000 and $50,000 will nearly double from 1998 to 2003, according to research company Jupiter Communications.

In addition, the number of households trading securities online will increase from 4.3 million in 1998 to 20.3 million in 2003, showing that consumers will increasingly grow comfortable managing their assets online.

Customers of Fremont, Calif.-based AdviceAmerica, who pay an annual fee of $99 to use the service, input their financial history and financial goals for the future; then the site analyzes their data and offers them advice to meet those goals. If customers' circumstances change, they can update their plans at any time through the Web.

"A lot of self-directed people can plan their finances through the Web. It's almost like having a real adviser sitting next to you," said Pareek, who started two companies before AdviceAmerica.

The site also gives advice on mutual funds and lets subscribers look at the outcomes of various investment choices. Its secure database of information is based on advice from sources such as tax and retirement planners, investment experts and accountants.

The company, which has 30 employees, is financed through investors including Angel Investors and JF Shay Venture Capital.