In a recent New York Times article Robert J. Shiller, professor of Economics and Finance at Yale, puts forth the idea of government sponsored financial advice as part of the government bailouts earmarked for financial institutions. He posits that everyone needs individualized financial advice to help them make sound financial choices and that financial literacy alone is not sufficient to help most people develop and execute financial strategies. He further states that our current economic crisis may have been less severe if we all had access to financial advisers.

There are many voices calling for programs to address this great and pressing need; some are recommending volunteer corps and still others suggest that teachers and social workers should be trained to provide financial “coaching” as part of their duties. While I must admit that as a financial planner my heart patters at the thought of everyone having access to competent and ethical financial planning, these ideas concern me.

Financial planning services as they currently exist are not reaching a large portion of the population and it can be argued that the people who need it most are the least likely to receive the services.

However, a government subsidized plan will not address the primary reason for this discrepancy. Those of us who are working in the asset building field know all too well that services offered and services utilized do not go hand in hand. The ability to turn client need into client demand is not likely to occur within the framework presented by Mr. Shiller or other proponents of similar programs that focus on increasing the supply of providers. Adviser/client relationships are most effective when built on trust and that occurs when the client knows that the adviser is acting as a fiduciary – putting the client above all other interests. Mandated services will give many marginal advisers an opportunity to be paid to provide services to a population ill-equipped to “supervise” the process and the outcomes. This is not something that a self –regulating organization can effectively accomplish. Disagree? Let’s talk about Madoff.

Government sponsored or volunteer financial advice fails to consider the burden that is placed on the client. The old adage “buyer beware” is never more important than when a person is on the brink of changing their financial future through asset building. This is even more relevant when the government or community based organization puts a stamp of approval on a service delivery system that the organization is not actively monitoring. There is a need to provide access to financial advice and products and there are several organizations and collaboratives exploring the options. I suggest proceeding with caution as the desire to offer these services can be compared to our fast food nation…easy to access but not always good for you.

Saundra Davis, MSFP is Executive Director of Sage Financial Solutions – a nonprofit corporation providing financial planning services to low and moderate income clients.