By Jason T. Plank, CFS, CRPC®, AAMS®
Many financial planners focus on wealthy clientele, as this is where we feel that we can make the biggest impact. Often overlooked, however, are low income populations who are in desperate need. This is especially true now, when we are experiencing one of the most difficult economic and employment environments in many decades. Those who don't have access to, or feel they cannot afford, a financial planner or tax preparer typically do not seek out financial advice and many times do not even contribute to employer-sponsored retirement plans.
Pro Bono in Action
In the current economy, lower income individuals, families and business owners are feeling the cash flow pinch more severely than others. To help out, the Pro Bono Committee of FPA of Minnesota has been working with AccountAbility Minnesota (AAM) to offer pro bono financial advice.
AAM is a community-based nonprofit engaging a dedicated statewide team of more than 600 volunteer accountants and tax practitioners. These volunteers help thousands of low-income Minnesotans receive free tax help and related financial services. In 2008 the organization helped more than 17,500 individuals receive $25.7 million in tax refunds. The average annual income for AAM clients is about $12,000. Founded in 1971, AAM's experience and long history in the community enabled FPA of Minnesota to quickly and effectively engage pro bono clients.
During this tax season, 15 volunteers helped AAM clients three evenings a week from February to April. This pro bono work included education about credit reports, suggestions for credit repair or improvement, one-on-one financial planning advice by appointment and group financial planning workshops. Volunteers also provided special classes for the self employed. These services aim to help pro bono clients learn how to best use their tax refund and improve their economic stability during these difficult times.
How Can You Help?
If you are interested in stepping up and serving low income populations, contact your local FPA chapter and volunteer. (Visit www.FPAnet.org/Connect/Chapters to find your local chapter.)
Consider joining the pro bono or financial literacy committees at your local chapter. From there, find out if there are other non-profit organizations in your area that provide volunteer tax prep to low income residents. Consider reaching out to those organizations to establish a relationship where they could provide more services than just tax preparation with a partnership with FPA.
More Ideas and Tools
Here are some additional ideas to consider:
- Volunteers could help with credit reports and credit management or awareness by using www.AnnualCreditReport.com. (The Fair Credit Reporting Act FCRA gives all consumers the right to one credit report per bureau per year.)
- Your local FPA chapter could provide one-on-one financial planning sessions.
- Offer workshops targeted to low income individuals, families or business owners. This is similar to how FPA of Minnesota is partnering with AccountAbility Minnesota; AAM put together a training that describes how to use the Annual Credit Report Web site to give to volunteer financial planners.
- The Foundation for Financial Planning (www.foundation-finplan.org) and FPA Pro Bono (www.FPAprobono.org) Web sites have great tools that can be used for these types of volunteer efforts.
- Contact the local CPA chapter (www.aicpa.org) in your area to find organizations that are getting volunteer tax preparers and discuss an FPA partnership with a local organization in need.
Rewards and helping out
I recommend that all financial planners (especially those involved with FPA) consider volunteer and pro bono services. For planners, there is no greater reward than hearing clients tell you how much your advice changed their lives and assisted them in reaching their goals. No one should be left on the sidelines simply because they lack financial resources. Our work not only benefits our clientele, but also future generations, and has the ability to break the cycle of negative financial decisions.
Jason T. Plank, CFS, CRPC®, AAMS®, is a financial planner with Ameriprise Financial in Edina, Minn.