FFP Corporate Advisory Council:
Joint Statement on Pro Bono
FFP Announcement, November 12, 2020:
Coming Together to Help At-risk Americans in a Time of Crisis
The following statement was submitted by members of Foundation for Financial Planning’s Corporate Advisory Council, a group composed of business leaders in the financial advice sector who pursue a shared goal of bringing pro bono financial planning and advice to underserved people.
Even before COVID-19 hit our shores, we had all heard the dire statistics about Americans’ ability to withstand economic shocks, perhaps embodied best in the Federal Reserve’s 2019 finding that nearly 40 percent of people could not afford a $400 emergency expense. This already-vulnerable group, and many others, are now experiencing the health and financial devastation wrought by the pandemic. By October 2020, more than half of U.S. households reported financial challenges caused by the COVID-19 crisis, with 77 percent of those saying that they struggle to pay their bills. With many households reporting reduced income as unemployment remains high, people are facing wrenching economic choices. Many of them have nowhere to turn for expert, objective advice – whether to help them triage a financial crisis or rebuild their finances as things begin to improve.
Maya is a good example. She did so much right – built a small business, paid off her home – but when COVID-19 hit her community, her income plummeted, her debt increased, and she contemplated bankruptcy. Never a high-earner, Maya didn’t have a financial advisor, but she was able to access a pro bono financial planner through a project supported by the Foundation for Financial Planning (FFP). Her advisor helped her assess her financial condition, weigh her options, and prioritize and begin to pay down debt without the need for bankruptcy or selling her home. Across the country, pro bono financial planners are offering free, no-strings-attached advice to people like Maya to help them recover from the financial fallout of COVID-19 and reach toward a better future.
We believe that expert financial planning and advice is a critical asset for all families, and the pandemic crisis has made this truth plainer than ever. Although our companies may compete fiercely in the marketplace, we have all come together to support pro bono financial planning programs for underserved groups who otherwise would lack access. Especially during this national crisis, this service can be a life raft for so many struggling families.
By supporting FFP and the financial guidance programs they develop and fund, our companies are helping bolster a pro bono movement within the financial advisory profession. We share FFP’s vision of establishing a robust tradition of pro bono service in financial advice, similar to what exists in the much-older professions of law and medicine. We believe our commitment to pro bono work will help improve the financial resilience of Americans facing hardship, while at the same time benefiting not just our companies, clients, employees, and stakeholders, but also our entire profession.
As proud members of FFP’s Corporate Advisory Council, we are seeking to engage more allies and partners to power this movement.
Today, we are issuing both a recommendation and a commitment:
The American Bar Association recommends that all attorneys devote at least 50 hours to pro bono service each year. The Certified Financial Planner Board of Standards, Inc. (CFP Board) 2019 Certificant Survey found that about two-thirds of CFP® professionals engage in pro bono at an average of 31 hours per year, but CFP Board has yet to issue a formal recommendation. We urge the CFP Board to adopt a recommendation to certificants to engage in a minimum of 25 pro bono hours annually. While we suggest that this should be voluntary and not mandatory for CFP® professionals, we believe such a recommendation could serve as an important cue to the profession and encourage more practitioners and firms to engage in pro bono service.
As leaders in financial advisory, we know there are steps all of us can take to encourage pro bono service. That’s why we pledge to assess our firms’ own policies and practices to determine if changes are needed to better advance pro bono work among our staff, clients, affiliated advisors and other stakeholders. By the end of 2021, we will be addressing questions such as:
- Do we have the right policies and practices in place to encourage pro bono financial planning volunteerism among our constituents, including ways to make pro bono easier and turn-key?
- Are we promoting pro bono service to our stakeholders, including highlighting tools such as FFP’s ProBonoPlannerMatch.org, which matches CFP® professionals to pro bono volunteer opportunities?
- Are we lifting up the stories of our employees and affiliated advisors who do pro bono work, including the impact they are having on their pro bono clients?
- Is the pro bono service we are fostering continuing to serve diverse populations and addressing the economic inequalities in our society?
As we answer these questions and seek improvements, we will continue to embrace change where needed, make recommendations to FFP regarding new resources that companies can use, and work to bring pro bono financial guidance to more Americans in need.
Finally, we ask you to help. Do you have ideas that could enhance pro bono in the profession? Would you like to get involved with FFP’s pro bono mission? If so, let us know at Ideas@FFPprobono.org.
Together, we can play a key role in elevating our industry while assisting Americans to navigate the financial uncertainty and challenges of COVID-19.
FFP Corporate Advisory Council Representatives:
Bernie Clark, Executive Vice President and Head of Schwab Advisors Services /TD Ameritrade Institutional (Council Co-chair)
Terri Fiedler, President & CEO, AIG Financial Distributors (Council Co-chair)
David Canter, Head of the RIA and Family Office Segments, Fidelity Institutional
Eric Clarke, CEO, Orion Advisor Solutions
Gabriel Garcia, Managing Director, E*TRADE Advisor Services
Mark Gochnour, Head of Global Client Services Group, Dimensional Fund Advisors
Ben Harrison, Head of Advisor Solutions, BNY Mellon’s Pershing
Steve Larson, Head of Platform Services, T. Rowe Price
Rachel Schnoll, Head of FinLife Partners, Goldman Sachs
Anthony M. Svach, Managing Director, BlackRock
Sources for statistics in first paragraph:
- Report on the Economic Well-Being of U.S. Households in 2018, Federal Reserve of the United States, May 2019.
- The COVID-19 Pandemic’s Financial Impact on Consumers, TransUnion/Qualtrics Research Services Consumer Survey, October 28th