The Ladder

A Blog from New America's Asset Building Program

Who Needs a Financial Planner? Everyone.

Published:  January 8, 2013

For years we've occasionally published a compendium of policy ideas from the asset building field. We call it The Assets Agenda, and that link will take you to the 2011 version, which includes more than 60 discrete policy ideas. One of those ideas calls for the creation of a "Financial Services Corps," a resource of non-biased experts to assist low- and moderate-income families in managing the complexities and stresses of modern financial life. That's a service that's currently available to those that can afford it, and there are private sector efforts that market to low- and moderate-income individuals, but their quality can be hard to ascertain, and the same is true of their independence (don't use an adviser that's trying to sell you things!). We've kicked the idea around for years now, but it's always been something that was deemed too difficult to fund and scale to really merit a huge investment of our time.

Meanwhile, Mayor Bloomberg funded something called Financial Empowerment Centers to provide just such services to residents of NYC. That experiment proved successful and made its way into the City's annual budget. NYC has published a number of reports on the effectiveness and promise of this approach. Yesterday, Bloomberg Philanthropies announced that they're awarding $16 million to help five other cities (Lansing, MI; Denver, CO; Nashville, TN; Philadelphia, PA; and San Antonio, TX) to replicate the Financial Empowerment Centers.

Lansing Mayor Virg Bernero released a statement, saying, "I believe we must provide more than a Band-Aid to families in crisis, and I am committed to connecting Lansing’s residents with tools to reach financial self-sufficiency and to climb out of poverty."

That's the upshot of the whole FEC model, and our thinking about creating a Corps years back. It isn't easy to do, it requires reforming existing institutions and changing entrenched attitudes, but it can be done. By coincidence, Mae Watson Grote of The Financial Clinic, which is one of a number of providers in NYC's original program, has a piece up in Spotlight on Poverty today in which she explains how the Clinic's work, and the FEC model can succeed, "By expanding traditional social service models to deliver a more comprehensive set of services, the field can collectively tackle underlying financial insecurity issues and contribute to a more economically stable nation. When we make financial security a top priority, low-income families are in a better position to escape poverty for good."

It's exciting to see the growth of models delivering needed financial counseling to vulnerable populations. Can these efforts be sustained? Can they take long-term root in cities outside of New York? I don't think we know the answers to those questions yet, but that's what's so exciting about the Bloomberg effort, we're going to know a lot more in a year or two than we do now.

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