How to counsel low-income clients

Your Mindset as a Financial Advisor When Working with Low-Income Clients

By offering your financial planning services on a pro bono basis, you have a unique opportunity to help people who are in challenging situations to rebuild their lives. By offering them basic financial management information and guidance, you will be working to develop the essential skills they need to make solid, life-enhancing choices.

Many clients in low-income situations will literally live from paycheck to paycheck, often on a weekly basis. Therefore, cash flow is almost always the most critical issue facing low-income clients. Basic budgeting skills are what they need the most.

As part of pro bono planning, you will probably have to adjust your mindset about time horizons. A typical client from your business practice might think in terms of years and possibly even decades (as with retirement planning, for example). For low-income clients, "short term" is this week and "long term" is the end of the month! One of the biggest challenges you'll face is helping low-income clients to expand their time horizons out to three months or even a year.

You'll likewise need to scale down your own idea of what the word "planning" means. With low-income clients, there's not a lot to plan for. After all, their income is very limited, which limits their planning opportunities as well.

Unlike with your other clients, don't come to the first meeting with a pro bono client expecting to do a typical goal-setting session. Instead, you'll be dealing with many of the financial basics of life. If all you accomplish at a meeting is showing a pro bono client how to balance a checkbook, that's cause for celebration!

Because you'll also have less "control" over pro bono clients, you'll do yourself a favor if you lower your expectations of what you can accomplish with them. That doesn't mean you should handle these clients any less professionally than you do your own; it does mean that being realistic with pro bono clients calls for a different definition of successful planning.

On many occasions, you may only get in one or two meetings before the client "moves on." The client might be unemployed, find work, and then can't make it to your meetings. Having reliable transportation might be a problem for some clients. And don't be surprised by last-minute cancellations; they happen in pro bono work.

It is important, therefore, to make the most of every meeting you do have, however short or long. As you begin to work with pro bono clients, just keep in the back of your mind that you may only get one or two chances to teach them something really important in their financial lives. Accordingly, make the most of your first meeting and every one thereafter.

While you have lots of good information to provide to low-income clients, telling them exactly what to do may inadvertently foster feelings of dependency on you or the sponsoring organization. Instead, encourage these clients to think and explore options and ideas together with you. Help low-income clients to see the sponsoring organization as a source of information and support. Guide these clients toward a realization that they do have choices, they can take charge of their financial lives, and they don't have to do it alone.

To assist you in this process, NEFE has developed several resources for your use. These resources include a Meeting Preparation Checklist, a Meeting Agenda, and multiple forms, checklists, and worksheets focusing on specific areas of need for low-income clients. The best place to begin planning your approach is with the Meeting Preparation Checklist.

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