Advisors who are willing to step outside their comfort zones can make a difference in their communities, and for themselves, by volunteering to offer pro bono financial planning to those in need.
To illustrate the impact such selflessness can have, The Foundation for Financial Planning and the College for Financial Planning presented their Pro Bono Financial Planning Volunteer Training at the annual virtual eMoney Summit. The training was led by Kristin Pugh, a private wealth manager at Creative Planning who is also a trustee on FFP’s Board of Directors.
Pro bono financial planning assists underserved individuals and families who need guidance and have limited financial resources, said Pugh. This sort of planning is limited, not ongoing, and stops short of implementation and monitoring. It involves basic financial coaching using a short-term mini-plan or action steps. Common issues discussed with these pro bono clients can include organization of family finances; banking issues, bill payments and budgets; medical, disability, life and property and casualty insurance; savings, investments and tax issues; credit and debt; available financial benefits; and consulting with other professionals.
Jon Dauphiné, CEO of the FFP, said advisors may be somewhat nervous about participating at first, but “often they go off and do this work and find it extraordinarily meaningful.”
Pro bono clients may be found through FFP’s Pro Bono Planner Match, the nearest FPA chapter, an FFP grantee with an active program, the FFP’s volunteer database and nonprofits in the community. These community-based organizations help wounded veterans, domestic violence survivors, struggling single parents and people who are experiencing health challenges, unemployment and natural disasters. These clients generally have limited access to financial services, are subject to predatory lending, trying to maintain public benefits while striving to earn or save more and are struggling with overwhelming debt and goal planning, said Pugh.
“They often just need someone to help organize their thoughts,” she said.
Pugh said volunteers should try to fully understand and sympathize with clients’ circumstances by practicing effective listening skills: nodding, listening, making good eye contact and taking notes.
“All I did was listen, and I reflected to them you are doing everything you need to do right now,” she said. “Sometimes all we need is someone else to tell us we’re doing well and we’re doing the best we can.”
It's important to maintain a positive attitude during these meetings, said Pugh.
“For many, many clients this is a frightening and huge step,” she said. “Finance talk is often taboo. Before, during and after every session, please thank them for sharing the information.”
“Remember this is not a sales opportunity,” stressed Pugh. “You’re not trying to obtain them as for-profit clients.”
In terms of liability, both FFP and FPA offer E&O liability insurance coverage for free to qualified pro bono volunteer advisors.