Oran A Hall | Personal financial allies

A financial ally is a person or institution that helps people to make informed decisions, protect what is important, and stabilise or rebuild after a shock. The ally equips and empowers, not decides, takes responsibility for, or acts for a person.

Allies are useful in good times and in bad times; they may be corporate entities or people. They are useful for the support they are able to give, the doors they are able to open, the experience they are able to draw on to give guidance and support, their ability to see blind spots the beneficiary may not be able to see and negotiate, and their ability to make the beneficiary accountable.

Financial allies come in many forms – trusted family and friends, a mentor with relevant experience, professional financial institutions, government agencies and programmes, and voluntary bodies like churches, citizens’ associations, educational institutions, and professional groups.

People who are in the early stages of establishing their financial position often need guidance in understanding the basics of personal financial planning. They need to learn how to set and achieve meaningful goals and how to achieve them, learn about financial pitfalls, learn how to save and invest, learn how to access and manage credit, and learn how to set up and manage a business, and how starting to plan for retirement from early can be beneficial.

While it is true that people must take responsibility for their own affairs and take the initiative to acquire the knowledge necessary to make effective decisions by, for example, taking courses, reading, doing internships where possible, listening to and watching relevant programmes, learning from people with experience is a very effective way to be equipped to make good, relevant financial decisions.

Needs of elderly

Even older people need support from people with relevant experience and the key to open important doors. They also need guidance to steer clear of risks and to be able to identify opportunities and embrace them when they arise. More than that, they need to be able to create opportunities for their own benefit.

People in financial straits, perhaps more than any other group, need support and guidance. They need support to do a deep examination and diagnosis of their situation. They need to be able to find the solutions to their problems, they need to be able to identify the sources of assistance, as well as how to decide which solution fits their situation best.

Unfortunately, there are people who have very limited means and may need assistance from state agencies. They need to know the available benefits and how they can be sourced.

These groups and individuals need allies like those that follow.

Personal allies like family and friends can assist with encouragement, financial support in the form of gifts or soft loans, and food and shelter for the less fortunate where necessary. Government agencies can make good allies. The Programme of Advancement Through Health and Education (PATH), for instance, can be a good ally to the people who have insufficient financial resources to meet their needs. The National Housing Trust (NHT) can be a great ally for people who aspire to home ownership as well as those who want to make improvements to their homes. But there is a price. Generally, people who want the NHT to be their allies should be contributors to it and should be current with their contributions.

Key allies

Mentors are key allies. They come with significant experience and tend to have great interest in their mentees. They give of their time willingly, and are generally able to add value to their mentees by drawing on their own experiences – bouncing back from job losses, financial failure, academic failure, and business failure, for example. Having ‘been there, done that’, they are able to bring empathy to the relationship and can really be authentic assets.

Church and community groups serve as allies by hosting financial literacy programmes and workshops. Some also have programmes through which they offer skills training and educational courses.

Financial institutions, such as commercial banks and credit unions, can also be good allies. They provide loans to facilitate the achievement of important goals – for business and education, for example. They also provide opportunities to save for important goals, in addition to useful financial advice.

Licensed securities dealers are also good allies to have. They offer investment products and services which can help to realise very important financial and personal goals. They also have qualified advisers who are able to help in tailor-making investment portfolios to realise the goals of each person. Building strong relationships with these institutions and their advisers can be very profitable.

Insurance advisers are also worthy allies, providing relevant advice on life, health and property insurance – allies who focus on protection.

A true ally helps you see options clearly, is not driven by selfish objectives, is not motivated by personal gain, is not focused on quick-fixes, but is focused on your long-term growth and in helping you to help yourself. Your role is to be a serious and committed ally yourself – no shortcuts, no abuse of the relationship.

Oran A Hall, author of Understanding Investments and principal author of The Handbook of Personal Financial Planning, offers personal financial planning advice and counsel. Email: finviser.jm@gmail.com