Any advisor who’s had a teacher for a client knows that in the subject of personal finance, educators need help.
You can't blame them for being bad students though. Too many have bought expensive products from salesmen more concerned about making quotas than showing educators the best way to save for their future. These salesmen are giving them suitable products (according to the fiduciary standard) and taking advantage of them.
I've heard the same story, repeatedly: "He snuck into my classroom during a plan period! These are the sacred 50 minutes of my day that I get to eat, grade and talk to other teachers. He then approached my desk to talk about my 403(b), so I humored him. Then I come to your office only to find out he has me in one of the most expensive products I can be in. Why did he do that to me?”
Insurance firms count tens of thousands of teachers as subscribers to these products. AXA Equitable bills itself on its website as "the #1 provider of retirement plans for employees of K-12 schools [serving] more than 739,000 participants in over 17,000 retirement plans."
Once teachers are locked into these plans, the costs add up. One of my younger clients, for instance, had been diligently saving and wanted to move to another 403(b) company. On her $14,000 account, it cost her just under $1,000 to break the contract and move to another vendor. For having a change of heart, it cost her 6% of her retirement savings to move her account. All this on top of the expensive fees she was already paying.
After four years of focusing on working with teachers, I want to give educators another option. The launch of the Finance for Teachers Network aims to start making this situation right.
The Finance for Teachers Network is for financial advisors focused on providing the best fiduciary financial advice to educators. This group of independent advisors will have such zeal for helping those who teach our children, that we will become a force to be reckoned with should any product salesmen come across our path.
So why is this network starting now?
I wanted to belong to a community of advisors who felt as passionately about my clients as I did. I wanted to be surrounded by experts in this client base so I knew that any situation I came up against, I had fellow advisors who could assist me in providing expert financial advice. I wanted to be part of a community that wanted my practice to grow and win as much as I did. The Finance for Teachers Network is built for this purpose.
But it goes further.
Many advisors want to work with educators, but need some guidance and help in doing so.
The network has six coaches that are available to do just this. Ranging from a freelance writer to help shape website content, blogs and marketing material; marketing coaches; online lead generation and website designers -- it’s all here to propel your practice to the next level.
The network will offer three tiers of membership, with monthly fees from $50 to $1,000 a month. The advisors who will benefit from the highest level of membership are working with educators that are well-compensated, maybe married to a private sector worker, or have a long tenure in teaching which often results in a larger income. The advisors who are part of the network are frequently working with educators who make over $75,000 and have excess income to save.
As the network gets established and fellow advisors join this quest, we want to help educate the educators, plan for their future and give them the best financial advice they can receive. In the future, the network will show educators where to find these advisors and advisors can continue working with those they feel so passionately about.
No longer will our finest educators lack financial education, nor have an advisor ill-versed in their problems. No longer will those seeking a quick sale prey upon our teachers. Those shaping the next generation deserve better.
Who’s with me?
Dave Grant, a Financial Planning columnist, is founder of Finance for Teachers, a planning firm, and the Finance for Teachers Network, in Cary, Ill. He is also the founder of NAPFA Genesis, a networking group for young, fee-only planners. Follow him on Twitter at @davegrant82.
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