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If your elderly mom needs assistance with daily money matters, but you live three states away, where do you find the help she needs?
For years the best I could offer in this situation was a referral to a bookkeeper. Now I know of a better option — a daily money manager. Maggie Knowles, a daily money manager based in Seattle, recently gave me an overview of the services she provides to mostly elderly clients.
Maggie describes her work simply: she is the hired person who does what the middle-aged daughter would do if she lived nearby and had the time. Once or twice a month, she sits at a client’s kitchen table, opens the mail, and helps pay the bills. She does not touch her clients’ money, does not pay bills remotely, and makes no financial decisions for them. She makes sure that bills are not overlooked, that checks are written correctly, and that payments get to the post office.
What she catches matters. Seniors in their eighties and nineties are natural targets for fraud, and someone else reviewing statements every month is a meaningful deterrent. She has also spotted problematic patterns aside from outright theft, such as clients draining their retirement funds by overspending or rescuing adult children with money problems. In those situations Maggie doesn’t decide anything. She lays out the numbers, asks whether this is what the client intended, and suggests a conversation with their financial planner. The decision stays with the client.
Bridging the Gap Between Independence and Assisted Living
The financial stakes of that kind of presence are real. Many older adults can manage most activities of daily living on their own but genuinely cannot keep up with their bills. When bills go unpaid, the conversation turns quickly to assisted living. A money manager who keeps the finances organized can allow someone to stay in their home longer, which is not a small thing financially or emotionally.
Because Maggie is in clients’ homes, she sees things that a planner meeting someone in a quarterly office visit simply cannot. One client was resisting pressure from his adult children to give up driving. Maggie laid out the numbers — insurance, gas, maintenance — and the cost of keeping the car finally persuaded him to give it up. Another client hadn’t seen her family in Europe for 15 years but only had landline phone conversations with them. Maggie set up a smartphone with video calling. During her monthly visits, she would connect the client with her overseas relatives. This helped the client maintain those relationships as well as reassuring the family that she was being taken care of.
Referrals come most often from estate attorneys, financial planners, and CPAs who recognize the value of the work but are not equipped to do it themselves. Professional liability insurance is available through an insurer that actually understands the role, which most banks and insurance companies do not — Maggie regularly has to educate bankers on what a daily money manager is and why her client has invited her along.
If you have an aging parent whose bills are starting to be neglected, or a client who needs more hands-on financial oversight than a planner provides, you might consider hiring a daily money manager. The American Association of Daily Money Managers can help you find someone in your area.
Because trust is crucial in this work, the AADMM maintains a code of ethics and runs a background check on members every two years. Maggie requires that clients feel comfortable with her before she begins working with them, and she declines clients she is not comfortable with herself. From that beginning, a mutually trusting relationship can be formed around the kitchen table.
Rick Kahler, MS, CFP®, CFT™, CeFT®, is the founder of Kahler Financial Group, a Rapid City, SD-based fee-only Registered Investment Advisor.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
