You probably graduated from a college or university somewhere. It might have been 12 years ago or 12 months ago. You still keep in touch with past roommates and fraternity or sorority members. You joined the local alumni chapter. You belong to their social media groups. Why do the people you know from school need you as their financial advisor?
- Young families need life insurance. They might have moved into a high paying job when they graduated, but they are spending everything they earn providing for their young family. What if something happens to them? How will their income be replaced?
- Saving money is hard. It’s especially difficult saving with after tax dollars. They need someone to give them advice about retirement savings plans at work, dollar cost averaging and how whole life insurance builds cash value. You know about these topics.
- They need a financial plan. You’ve seen the statistics showing graduates with a financial plan tend to do better than those who sail through life and wing it. You have different types of plans available at different price points. Some might be free.
- They want their children to follow in their footsteps. They appreciate the education they received. They want their children to get the same benefits in life and see this as a good start. It’s going to be expensive.
- The school wants them to transition from student to donor. The solicitations start almost immediately. Classes have reunions. They give a class gift to the school. There’s annual giving too. You understand there are other ways of contributing money besides giving a check.
- The successful grad wants to leave a legacy. Now we are taking about graduates on the other end of the age spectrum. They want to endow a scholarship. The school can help advise them, but they might want a person in more of an independent position. You know about alternatives like donating appreciated securities.
- Retirement planning. The new graduate might think this is far, far into the future. Remind them about their years in school. “The days are long but the years are sort” is a good expression. The graduate in their 40’s or 50’s might see a more immediate need for retirement planning advice.
- Do they own restricted stock? Some graduates might have done really well for themselves. They have Rule 144 stock. This requires some professional advice. You are in a position to help.
- The older graduate seeking to provide for their spouse. They don’t want them to ever worry about money if they die first. They paid all the bills for decades. You are in a position to suggest ways to keep a “paycheck” coming in.
- Are they between jobs? Not everyone lands a great job when leaving school. Sometimes people find themselves in the wrong job. Other times they lose their job through layoffs, mergers, or downsizing. There isn’t money to be immediately made, but you care enough to help them try to find their next job or at least lend a sympathetic ear. (The retirement plan rollover might come later.)
Regardless of your length of time outside of school and regardless of theirs, your fellow alumni represent a pool of people who may need advice.