This has been a crazy year. The election divided the nation as the candidates argued over who could best champion the interests of the middle class, especially those who are struggling economically and feel left behind by globalization and technological change.
The Department of Labor's fiduciary rule roiled the industry as debate continued on the ethics of the advisory profession's compensation models and standard of care toward investors. And this year's scandal involving a major financial institution's inappropriate sales practices further eroded the public's trust in the financial service sector's integrity. Conflict and controversy have consumed much of the national conversation.
SERVING THE LESS FORTUNATE
Running below the fractious political and policy discussions, there's an untold story that seems especially important to surface in these divided times, and as we enter another holiday season of giving: Many financial advisers are fiercely committed to giving back, to serving those less fortunate with their objective counsel and expertise. Across the country, planners volunteer their time and talents helping vulnerable people — including wounded veterans, domestic-violence survivors and people with serious illness — to navigate tough financial issues and improve their lives.
The Foundation for Financial Planning exists to catalyze this work, to power pro bono financial planning by providing more than $6 million in support to local organizations and, with our partners, activating more than 15,000 volunteer planners over the last 21 years. As a younger profession, financial planning does not have as lengthy a pro bono tradition as law or medicine, but many planners joined the profession to help people and are eager to lend a hand to those who otherwise could not access services. Our survey of pro bono planners this year reveals this commitment:
• More than half of survey respondents provide one to two hours of pro bono service per month, with almost 10% providing more than 10 hours.
• About 60% said they had no preference between leading educational workshops and providing one-on-one counseling, but of those who did, three times as many (30%) preferred giving one-on-one advice.
• Almost 46% said they had no preference between providing a one-time session versus multiple meetings with the same person, with the rest splitting 2 to 1 in preferring one-time sessions — indicating a perceived need to balance pro bono with ongoing professional duties.
• A whopping 89% of volunteers said they were more likely to do business with a company that visibly supported pro bono, with 38% “a lot” more likely.
Not surprisingly, the vast majority of planners say the main reason they volunteer is to “help people who need it most.”
But given the dire need that so many underserved people have for objective, expert financial advice, we are currently only scratching the surface. In these uncertain times, in this holiday season, I challenge you to think about how you might give back. Here are some ideas:
1. Contact your local Financial Planning Association chapter — many have pro bono programs serving vulnerable members of the community and could use new volunteers.
2. If you are a certified financial planner candidate, consider providing pro bono planning services to satisfy part of your experience requirement.
3. Talk to your employer about supporting pro bono activity in your community by, for example, informing the CFP professionals at the firm that they may provide service as an “outside business activity,” providing guidelines and crediting a few pro bono hours as time worked.
4. Explore the nonprofits that help vulnerable people in your community and recommend that they expand or adopt programs incorporating free financial planning — the foundation may be able to support them with a grant.
The bottom line is that your engagement in pro bono can help deepen the profession's commitment to service in the public interest while providing you with satisfying opportunities to help others who are less fortunate.
One volunteer planner recently told me that he wasn't sure what he was getting into when he began to volunteer at a local nonprofit; he had only ever worked with high-net-worth clients. But he was struck by the impact he could have and by how much his pro bono clients appreciated his help. He worked with one client, a struggling cab driver, for more than a year — helping him conquer his debt and eventually buy a home.
(Related read: FAQs: The most comprehensive fiduciary database)
The planner told me with a smile, “He said I was the reason he realized his dream.”
Won't you join us in powering pro bono financial planning?
Jon Dauphiné is executive director of the Foundation for Financial Planning.