In May, several leaders of the financial planning profession took part in a first-of-its-kind summit. The Foundation for Financial Planning convened the meeting, attended by its CEO Jon Dauphiné, as well as Kevin Keller from the CFP Board of Standards, Lauren Schadle of the Financial Planning Association and Geoffrey Brown of the National Association of Personal Financial Advisors.
These executives have collaborated before, but this meeting was different—it was about advancing and expanding pro bono services within the financial planning profession.
Most professions, including the legal, medical and dental fields, have practitioners willing to donate their time and skills to underserved people, and as the financial planning profession grows, pro bono work will become more important to it as well.
Why Pro Bono?
Since most financial planners spend a considerable amount of time, effort and money trying to acquire new clients, it is easy to ask why one would give away their expertise. Doctors, lawyers and dentists spend a lot of time, effort and money building their practices too, yet they still have an ethos of community service firmly ingrained in their cultures.
Pro bono is short for “pro bono publico”—for the public good. In the legal world, the moral argument for this type of work rests on the idea that, first, the law touches every citizen and, second, not everyone can practice it.
We don’t often say it, but such work is important to the financial planning profession for similar reasons. Personal finances affect virtually everyone, yet not everyone can practice financial planning. The field doesn’t currently work under a regulatory structure as clear as that of the law, which doesn’t allow unauthorized practice. The public finds financial planning, by contrast, to be a more confusing space with looser legal structures and definitions for those holding various titles and licensing, even though the practice requires special skills not everyone has.
To foster pro bono work in the legal profession, the American Bar Association created Model Rule 6.1 which says:
“Every lawyer has a professional responsibility to provide legal services to those unable to pay. A lawyer should aspire to render at least (50) hours of pro bono publico legal services per year.”
One of the ways the lawyer should fulfill this responsibility is to “provide a substantial majority of the (50) hours of legal services without fee or expectation of fee to: (1) persons of limited means or (2) charitable, religious, civic, community, governmental and educational organizations in matters that are designed primarily to address the needs of persons of limited means.”
Lawyers should also offer services without charge or at a substantially reduced fee to people and organizations protecting civil rights, civil liberties or public rights—or to charities and religious organizations—if the charges would otherwise drain those groups’ economic ability.
A few things stand out in the model. Note that it does not mandate pro bono work, but frames it as a professional responsibility lawyers should aspire to. It quantifies that responsibility at 50 hours a year. And it explicitly targets persons and organizations of limited means. (Giving favors to a well-to-do neighbor doesn’t count). Furthermore, one of the model’s aims is to improve the law, legal system or legal profession, and it encourages financial support to organizations that provide pro bono services.
Financial planning isn’t quite there on all these items, but the CEO summit is a significant step in a good direction.
Outcomes Of The CEO Summit
A number of themes emerged from the summit. One is that there should be a consistent definition of “pro bono” and that the major professional organizations should promote the importance of pro bono work among their practitioners. The organizations should also encourage practitioners to volunteer, to develop more opportunities to serve, and to engage CFP emeritus members and the rising generation of new planners. Advisors should also start dialogue to spur growth of pro bono activity.
Defining pro bono consistently is an important step in directing the profession’s efforts. The definition is “free, no-strings attached financial advice and planning for underserved people, including low-income individuals and families; military personnel and veterans; domestic violence survivors; and people affected by natural disasters, serious medical crises and bankruptcy,” and that the advice “is provided by or in conjunction with a volunteer CFP professional.”
That definition speaks directly to financial advice and financial planning, as well as to advisors’ specific skills in delivering those things to improve people’s financial literacy. Other people might be working on helping the world with financial literacy, but they are not trained as planners. A CFP professional brings a set of rules and standards to the engagement with a person in need of financial help.
To promote more pro bono work, the Financial Planning Association and the Foundation for Financial Planning have launched a new, free online pro bono training program that lets advisors qualify for one hour of continuing education credit from the CFP Board. NAPFA has plans to add pro bono into its CE program in 2020.
Following the success of its Pro Bono for Cancer Campaign, in which CFP volunteers could meet with cancer patients remotely, the Foundation for Financial Planning is developing an online volunteer matching program. This should help willing practitioners find volunteer opportunities if they don’t otherwise have a local organization to work with or an FPA chapter with a strong pro bono program. There is very little risk in doing so. FPA provides its members free errors and omissions (E&O) insurance coverage to protect volunteers participating in FPA-related pro bono activities like the Pro Bono for Cancer Campaign.
Part of the business case for pro bono work in the legal profession is that the experience helps new lawyers develop: The more time in front of clients they spend, the better their counseling and interpersonal skills. And many law firms report that their pro bono programs help them recruit new lawyers as well.
This makes sense because pro bono work resonates particularly well with younger generations. I experienced that firsthand speaking at the FPA NexGen Gathering in 2018 and at the XY Planning Network conference. (The latter produced 96 new pro bono volunteers.) To plant the seed early in aspiring professionals’ careers, the foundation and the CFP Board now present an award each year to the CFP Board registered program doing exemplary work getting students involved with underserved members of the community.
FPA members and CFP professionals that renewed with either organization recently may have noticed that they were asked about how many pro bono hours they had provided. NAPFA ran an extensive campaign this year (the “One Hour Challenge”) encouraging pro bono activity. These are new efforts to gather data about the extent of pro bono work within the profession.
People are having more conversations about the subject. Give some of your time. Encourage your newer staff to engage with you on pro bono work. Reach out to your FPA chapter’s pro bono chairperson. Donate money to the Foundation for Financial Planning. Schwab Advisor Services has started a generous $500,000 matching campaign in honor of the foundation’s 25th anniversary in 2020, which helps your contribution make twice the impact.
A recent survey of CFP mark holders found that nearly seven in 10 think it’s important for CFPs to provide these services to people in need. If you believe financial planning is a profession, that you are a professional and that it is indeed a privilege to practice, consider adding pro bono work and funding to your 2020 agenda.
Dan Moisand, CFP, has been featured as one of America’s top independent financial advisors by Financial Advisor, Financial Planning, Investment Advisor, Investment News, Journal of Financial Planning, Accounting Today, Research, Wealth Manager and Worth magazines. He practices in Melbourne, Fla. You can reach him at [email protected]