When Should You Offer Pro Bono Advice?

By Brian O'Connell InsuranceNewsNet

A group of U.S. financial planners are giving back to their client communities by providing pro bono services for low-income individuals who otherwise likely couldn’t afford the services of a professional family planner.

Brought together by the nonprofit Foundation for Financial Planning, the group finished a month-long campaign on Oct. 31, and is already planning next year’s effort.

“Hundreds of financial planning professionals partner with local city governments and gather in designated schools, municipal buildings, and libraries to offer free financial counsel to area residents,” the FFP stated. “The mission of the initiative is to bring free, ethical financial planning advice to the public through one-on-one advising sessions and group workshops.”

In the pro bono sessions, advisors can’t distribute business cards, take names, or sell financial products or services, the group said. Still, hundreds of planners participated in the campaign.

“It’s a real way for advisors to give back to the community without making a huge time commitment," said Jon Dauphine, executive director for the foundation.

For advisors, the takeaway is a rewarding experience, and also a reflective one.

“Giving pro bono advice to families in crisis can be a humbling experience for a financial advisor and motivate them in their own practice,” said Steve Azoury, owner of Azoury Financial in Troy, Mich.

Azoury lists several ways money managers can help the less fortunate financial consumer:

• Making them aware of issues where they have no experience.
• Helping them understand types of insurance.
• Determining budget and cash flow.
• Arranging insurance claims.
• Dealing with credit card payment issues.

Helping with those key issues will help take the weight off the shoulders of the “family in crisis,” Azoury said.

Some pro bono work is part of being a caring professional, he added.

“But advisors should know that pro bono work is a very different situation to their usual practice techniques,” he explained. “Most pro bono help is about putting out the fire.”

For example, if a client has lost their job, declared bankruptcy, or gone through a divorce.

A professional who provides pro bono help requires “a high level of commitment and compassion, as well as considerable expertise and experience for those in need,” Azoury said. “Pro bono advice and counseling of a calm and competent financial advisor can have an amazing and gratifying impact on those in need.”

The greatest challenge, he said, is helping people change their financial behavior.

“The math is easy, but encouraging people that they need to make more and spend less can be difficult,” he said.

Some financial advisory firms tie in pro bono work with client marketing – a hybrid that balances charitable services with old-fashioned, shoe-leather marketing.

Take Abacus Wealth Planners, with offices across the U.S., including Los Angeles, San Francisco, and Washington, D.C. The firm offers free financial planning for one year, consisting of quarterly meetings, with the elimination of fixed minimum fees for investment management (although Abacus will charge a 1 percent fee if the individual elects to invest money with the firm.).

“After one year, you graduate from this program and have the option of hiring Abacus to continue as your financial advisor,” the firm states on its website. “If you choose not to hire us, we will have one final transition meeting where we guide you on how to manage your own financial matters.”

Offering pro bono services can be a tricky proposition. You don’t want anyone thinking you’re in it for the money, and you don’t want to dive in too deeply and take time away from your regular clients.

But done right, and with good balance, it helps people out and enables advisors to give back to their community. It also helps create better-educated investors.

That’s a win-win for all parties.

Brian O'Connell is a former Wall Street bond trader, and author of the best-selling books, The 401k Millionaire and CNBC's Guide to Creating Wealth. He's a regular contributor to major media business platforms, including CBS News, The Street.com, and Bloomberg. Brian may be contacted at [email protected].