Last year, a group of mostly low- and middle-income people from the San Francisco/Oakland area gathered for a free financial planning seminar sponsored by the East Bay Chapter of the Financial Planning Association, an event geared to people who don't usually have access to advice. Many in this group were surprised at the conference to find out they had money waiting for them in bank accounts they didn't even know existed.
California State Controller John Chiang had done a computer search on all those who had signed up for the conference online and found the dormant accounts. Each name Chiang called out during that session drew a cry of delighted surprise, noted Gordon Dunne, managing director of the Financial Services Network, San Mateo, Calif., who is also president of the East Bay FPA chapter. Despite some accounts with a few thousand dollars in them, most of the new found money was in small amounts. None had enough to drastically change any lives.
For that, the participants were looking hopefully to the financial planners who donated their time.
The attendees included those normally underserved by the financial planning system, including the poor, those with literacy problems and those who just never felt they had enough assets to warrant a financial planner's attention. Planners came to answer their questions, offer advice and show them how to budget, among other things, and hopefully lead them to long-term life changes.
Financial planners are often casting their nets for rich clients, trying to help people increase or preserve the wealth they have already created. But most Americans do not fit that category. The median household income in the U.S. is $50,000. Almost 10% of Americans are now unemployed and more are underemployed with debts growing.
Yet a growing number of financial planners and experts are changing that and offering to help those who are underserved. Saundra Davis, the president of Sage Financial Solutions, a small not-for-profit in San Francisco, goes so far as to call the effort a groundswell.
Davis is a teacher, financial coach and mentor in the not-for-profit sector (rather than a professional financial planner). But many CFPs in the San Francisco Bay Area, one of the richest regions in the country, are also involved in organized efforts to provide planning to those who can't afford it, offering low-income people time in a number of formats-one-on-one meetings, group sessions, seminars and educational workshops, among other things.
One of the people Davis has helped is Dametra Williams, a Bay Area single mother who was working for $10 an hour when she discovered the Earned Asset Resource Network (EARN), a not-for-profit that matches eligible clients' savings with $2 for each $1 saved and helps them take control of their financial lives. Davis is co-founder of EARN's Wealthcare Financial Coaching Program.
By the time Williams found EARN she had almost no confidence left about her finances. She chokes back tears when she tells of trying to raise a daughter on a $10 an hour job, never being able to make ends meet. She compares herself unfavorably to her own mother, who managed to raise 12 children successfully.
With the help of EARN and its group of financial planners and coaches, Williams has created a budget and has saved enough that, with scholarships, she can get a college degree. She is sending her daughter to college and is starting her own small business.
Now she is more confident, and tells others with a broad smile on her face, "We forget sometimes, how strong we really are."