Pro bono work gives advisers way to go beyond helping the rich get richer

Like all reporters I know, I strive to be tough but fair. I don’t necessarily want the organizations and people on my beat to fear me, but I want to make sure they know I’m not a pushover.

When I filed a story recently on the Financial Planning Association announcing that its members increased their pro bono work by 18% last year, I highlighted the way different members are helping widows, domestic violence and fire victims.

After the story was published, I briefly worried that readers might think I went into the tank for FPA. It’s a feel-good topic about how the financial planning profession is trying to make the world a better place. Isn’t news supposed to be hard-hitting and reveal the flaws and foibles of the people and institutions we cover?

But as I thought more about the article, it occurred to me that pro bono isn't just about the soft power of reaching out to underserved communities. It also presents a hard challenge to the investment advice profession.

Many advisers have account minimums ranging anywhere from $250,000 to more than $1 million. That prices a huge number of Americans out of the advice market — including those who are struggling most in their financial lives.

The optics of the situation can be negative. It looks as if the adviser’s role is to help the rich get richer. In that context, it can be difficult to make the argument that your daily work is contributing to the betterment of society.

Even if an adviser is using a compensation method other than a percentage fee on assets under management, the price tag for advice can still be high. People who are struggling to make ends meet can’t afford to pay $1,000 for a financial plan, an hourly fee of a couple hundred dollars or even a monthly subscription fee that can add up to more than $1,000 annually.

I understand advisers are helping a wider swath of Americans than just the wealthy save for retirement and finance their children’s educations. They’re also working with the mass affluent. For the sake of argument, let’s say that group has between $100,000 and $1 million of investible assets, not counting the value of their homes.

A large portion of the mass affluent can be defined as the middle class or upper middle class. At that point, advisers can claim to be making a larger impact on society than if they were just serving high-net-worth individuals.

But where the real difference occurs is when advisers work with underserved communities where few people can afford the table minimums of an advisory firm.

That’s the population that turns to the Foundation for Financial Planning-AARP Retirement Resilience Program. They're worried about their nest eggs and don’t have the resources to hire an adviser.

Henry Fox, a financial adviser at Blue Bell Private Wealth Management, donates his time to the program by signing up for counseling sessions. It gives him a different way of using his certified financial planner background.  

“What I have enjoyed most is the opportunity to share my experience and knowledge as a CFP professional to empower and educate others who are struggling with making retirement choices, particularly regarding Social Security,” Fox said. “What has been particularly satisfying are the one-on-one phone calls where I was able to build a rapport and really impact a client even in a short time period.”

The payoff for pro bono work doesn't show up on the bottom line. It’s in the returns you get from touching someone’s life at a vulnerable moment.

“It’s a heartfelt thank you … [for] helping them feel they’re in a safer and more secure place than they were previously,” Fox said.

Everyone’s life is too busy. That’s especially true for financial advisers, who are trying to help their clients navigate a volatile market and all the other financial headwinds at the moment. It can make volunteering difficult.

But the advice community is carving out the extra time.

“We see a lot of appetite to do pro bono work among advisers,” said Jon Dauphine, chief executive at the Foundation for Financial Planning. “Pro bono is a way to bring service to those who otherwise couldn’t access an objective, ethical financial planner.”

That brings us to the pro bono win-win. When advisers engage in it, they’re not only helping the underserved. They’re also raising the profile of the advice profession and educating more people about it.

“By doing pro bono work, it helps people understand and appreciate our industry as a whole,” Fox said.

Perhaps advisers who help the underserved will give them the insight to turn their financial lives — and life in general — around. Maybe it will start their journey to mass affluence. That’s as rewarding as helping the people who are already there.