Pro bono work can pay off long term

At the height of the Covid lockdown, financial planner David O’Leary, founder and principal of Toronto-based Kind Wealth, got a call from a business owner who needed help.

More to the point, she needed free help. She’d mortgaged her home to invest in her business. But when Covid hit, everything started to fall apart.

So O’Leary offered his financial advice pro bono.

“She could see that she didn’t have the runway to keep the business going,” he said. “We had a pretty healthy conversation about what she could do. Could she cut her losses? What would that look like? What does it mean to claim bankruptcy?”

Ultimately, the conversations gave her clarity and comfort.

“Just to have somebody to talk to and unload all her financial worries, it ended up being a very valuable experience for her,” he said.

O’Leary got the call because he’d put the word out — on social media and in interviews with traditional media — that he was willing to volunteer his time to help needy and vulnerable Canadians find financial security. The response came not only from potential clients, but from other financial planners.

“People were reaching out to me, peers in the industry, who wanted to do the same,” he said. “There were about 15 or 20 of us. We set up a website where people could fill in a form and talk about the challenges they were facing.”

They’re not the only ones interested in making financial advice available to needy Canadians. The Financial Planning Association of Canada (FPAC) receives 10-20 requests a month for pro bono services through its online intake form.

And the Canadian Foundation for Financial Planning (CFFP) is in the process of setting up its own pro bono services. Interim executive director Stephen Faul said CFFP will organize free seminars by financial planners, offer an array of free web tools and resources, and will coordinate one-on-one consultations with financial planners offering their services pro bono.

“We are currently looking for additional sources of support to help bring our vision to life,” Faul said. “I’m very excited about what the foundation will do. I look at it as helping to change lives through the power of financial planning.”

Brett Martinson, financial planner with Parallel Wealth Financial Group in Langley, B.C., and chair of FPAC’s pro bono committee, said pro bono services are necessary because the financial advice industry was designed primarily for wealthy clients.

“Because it’s so bespoke, you can’t just mass produce it. It doesn’t have the same economies of scale,” Martinson said. “That means those who are wealthiest get the most access because they can afford it. But there is a big need among lower-income Canadians too, and their challenges are different.”

Martinson said most clients either need simple advice on basic financial concepts, or they need a deeper level of planning due to a developing situation or a recent life change. Either way, he said, the pro bono work should start with a fiduciary commitment on the part of the planner.

“You don’t legally have to be a fiduciary. However, if you have your CFP designation, the number one requirement there is that you must do what’s right for the client, whether you are getting paid or not,” he said.

O’Leary agreed that taking on fiduciary responsibility makes moral sense.

“Does the advisor have a duty to put their clients’ best interest first, whether that client is paying or not? Overwhelmingly I’d say yes,” he said. “And I think the profession does as well.”

The time commitment for pro bono work varies from client to client, but it does not have to be onerous, Martinson said.

“Our volunteers set aside anything from 45 minutes a month to a few hours a week,” he said. “It can be as little as providing a monthly seminar, to working with multiple clients at once, to working with a single client over the course of months to creating a comprehensive financial plan.”

For one-on-one sessions, a letter of engagement is a key part of the process, he said.

“Vulnerable people may be reluctant to sign something, but at the very least a letter of engagement that sets expectations is important for both the client and the planner,” he said.

There is little to distinguish a letter of engagement for paying clients from one for pro bono clients, other than that the latter would make no mention of fees. To avoid any perception of self-interest, FPAC insists a planner cannot solicit business if the client’s situation improves to the point where they could afford to pay for advice.

“We make it very clear that when a financial planner starts a pro bono relationship, no matter if the client wins a million-dollar lottery, that planner would not continue in a paying relationship with that same client,” he said.

O’Leary calls his letters of engagement “collaboration agreements” to set the stage for a fruitful relationship.

“The client needs to participate in the process. They have to share information. They need to talk to you about their hopes and goals and dreams,” O’Leary said. “If they’re not able or prepared to do that, then they shouldn’t even go down this road with us.”

Ultimately, he said, taking remuneration out of the equation opens the door for a lot of Canadians who would not otherwise get the financial advice they desperately need. And there are intangible benefits for the planner as well.

“I personally believe that treating people well and doing the right thing pays off long term. It makes me feel better in all sorts of ways, beyond just financial,” O’Leary said. “I want to do good work for good people who need it.”