EQUAL OPPORTUNITY
People with lower incomes to get financial planning help thanks to pilot project.
After a 25-year career in financial services, Carol Lynde is using her skills and connections to serve a larger purpose.
As president of Bridgehouse Asset Managers, she sells mutual funds to middle-income Canadians. But she knows there is an appetite for financial planning advice among those who can’t afford to pay for the service.
“In my role, I talk to lots of advisers,” she says. “They want to be part of something like this.”
Under a pilot program funded by the investment industry, 100 people living on low incomes in Toronto will work with volunteer professional financial planners to set realistic goals and work to achieve them.
These one-on-one sessions will run for several months, allowing participants to get advice tailored to their needs.
Lynde was impressed with the Foundation for Financial Planning, a non-profit charity that has given more than $5 million (U.S.) in grants to underserved people who needed help.
Hoping to start a similar initiative in Canada, she spoke to Joanne De Laurentiis, head of the Investment Funds Institute of Canada. This led her to Elizabeth Mulholland, president of Prosper Canada, a charity founded in 1986 to expand financial opportunities for people living in poverty.
“Low-income people are better at budgeting than average Canadians for obvious reasons,” says Mulholland. “They have a lot of practice. “But they may use payday loans or go to fringe financial lenders because they worry about having money seized from a bank account. They may also face language barriers and literacy barriers.”
Mulholland asked the City of Toronto, which supports 90,000 families a year through 19 employment services offices, to become a partner.
“Most individuals we deal with are on social assistance, primarily Onta- rio Works,” says Phil Eisler, director of workforce development and program support. “We also work with people who are underemployed.”
Eisler agreed to recruit low-income people to meet with financial planners at three Toronto employment offices (Beaches, Crossways and Metro Hall). He received twice the number of applications he’d expected.
Colin Barry, a certified financial planner at Canfin Financial Group, is one of the volunteers who answered the call. He had worked in aerospace at Bombardier and Goodrich for 15 years before making a career switch in 2012.
“This is a great opportunity to apply my skills and do good in the community,” he says. “I have two clients, both single moms. I’ll be having a first meeting with them in two weeks.”
Danny Carestia, a certified financial planner with C&C Planning Group, jumped at the chance to volunteer as he had worked for Toronto social services in the 1990s.
“I knew what this group goes through. I’d seen it firsthand,” he says. “I want to help them develop skills, such as debt management, beyond their current level and help them not slide back.”
Saeed Ally, a certified financial planner with Manulife Securities, wanted to learn how to help less privileged people.
“My clients are doctors, dentists and entrepreneurs. There’s a very large gap in my knowledge base that I have to fill at some point, understanding government programs for people living in poverty.” The MPower Money Coaching Program (a name created by marketers) is a one-year pilot initiative to explore the feasibility of using professional financial planners as volunteer coaches across Canada.
Can advisers to the affluent be trained to help those just squeaking by?
John Stapleton works with lowincome people to help them make better decisions. He says two things are crucial: 1) Training advisers to understand social programs and the penalties that may come with them, such as the inability to build assets; 2) Training advisers to explain tax rules clearly to those who don’t do their own tax returns.
Frank Wiginton, a certified financial planner who designs corporate education programs, thinks it’s a great initiative. His main concern is that volunteer advisers don’t succumb to sales pressure.
“This is about setting up a bank account or doing income taxes, things as simple as that, not about selling products,” Carol Lynde emphasizes. “It’s about planning and giving people the confidence to move forward.” Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca or ellenroseman.com.