By Thomas Lapp
One day a man stopped in to see an accountant. “I need a bookkeeper,” he said. The accountant replied, “Tell me more.”
“I’m finding that I cannot keep up with my bills and household finances like I used to and I need to turn this over to a bookkeeper,” the gentleman replied. The wise accountant said, “You don’t need a bookkeeper. You need a Daily Money Manager.”
What is a Daily Money Manager?
As this gentleman learned, a Daily Money Manager (DMM) is a financial professional who provides personal financial services to individuals and families, and who manages their personal daily money matters such as bills, budgets, record keeping and much more.
Just a few generations ago, this caregiving role might have been taken on by a son or daughter who would help the nearby parents continue to stay independent. However, children often no longer live near parents. Children may not have these personal skills themselves. And, unfortunately, family members without altruistic motives often see an older relative’s assets as something they feel they should be able to take advantage of.
Daily Money Managers close this gap and provide personal financial services to older adults, people with disabilities, busy professionals, high net worth individuals, and the small businesses they may own.
What Does a Daily Money Manager Do?
The expertise of DMMs covers a broad range of tasks. One of the benefits of a DMM is that they can provide a unique suite of services based on the specific client needs. Since these needs can change over time, the DMM is able to modify the provided services to continue to meet the client’s needs at various phases of life.
The scope of personal financial services generally includes:
- Bill paying, including calls to payees regarding incorrect bills and preparation of payments for client approval.
- Reconciling checking accounts and investment statements.
- Preparing and making bank deposits.
- Organizing tax documents.
- Negotiating with creditors.
- Reviewing medical insurance papers and verifying proper processing of claims.
- Providing general organization of financial papers and systems.
- Referring clients to legal, tax, and investment professionals and to community resources.
Additional DMM Services
Some, but not all DMMs will also provide additional services, such as:
- Notary services.
- Accepting responsibility to act as power-of-attorney or representative payee for Medicare.
- Fiduciary services such as trustee, executor, conservator, guardian, or health care proxy.
- Preparation of payroll checks for home employees including calculation of Federal and state withholding and FICA taxes.
- Financial counseling.
- Preparing budgets of spending plans.
- Preparing plans to reduce debt.
The Process of Engaging a Daily Money Manager
DMMs handle highly personal and confidential matters for their clients. As in any business transaction, personal judgment and instincts are important when deciding with whom you would like to do business.
Always ask for a referral from someone you know and trust, such as a friend, relative, lawyer, or accountant. You may also consult the American Association of Daily Money Managers website to search for a DMM in your local area.
The DMM will usually set up an initial, no cost, meeting so that you have an opportunity to ask questions and determine if this person is going to be both a good relationship fit and that they possess the skills and experience you need.
During this meeting, you should ask a number of questions to understand what their services, credentials, experience and level of professionalism is. Many people have “helped out” with finances for a neighbor, friend, or relative but you want to make sure you are not working with someone who “helps out” but is a professional in this business. To that end, some areas you may want to ask about:
- What is the scope of their work, and what do they propose for you? If you choose to hire this person, make sure the scope is outlined in writing in a formal agreement or contract. This agreement should cover areas such as confidentiality, rates and any additional charges such as supplies or travel.
- How long have they been working as a daily money manager, and what portion of their business is a client like me?
- Do they have areas of specialization such as health insurance claims, fiduciary services, working with couples, and counseling?
- Are they insured for Errors & Omissions as well as liability and at what level? If you want them to be a Power of Attorney, Trustee Executor for a Will or some other fiduciary role, ask them if they also carry fiduciary coverage.
- Ask them about their credibility by asking which professional organizations they belong to. Find out about their prior education and experience before they became a DMM. At minimum, you’ll want to make sure they are a member of the American Association of Daily Money Managers (AADMM) which requires a background check prior to acceptance of membership.
- Do they have standards of practice and a code of ethics to which they adhere?
- Ask about their expected interaction with other professionals you may already have such as a tax professional, attorney or investment advisor.
- Ask about costs and how they bill. You’ll want to fully understand their billing arrangement.
Finally, as you learn to know the person, make sure they provide transparency with your finances and that they don’t try to hide anything from you. A professional daily money manager will always work to accomplish your goals and manage your finances with as little access to your funds as is required.
The Value of a Daily Money Manager
While the gentleman at the beginning was just looking for bill paying bookkeeping, a daily money manager can provide so much more. With our experience and knowledge with personal finances, we often become the “go to” person for questions, referrals, and expertise.
Daily money managers may initially be needed to help out in a situation such as after a health event, or the death of a spouse. But clients come to find that the DMM brings them peace of mind around their finances, knowing that this area of life is under control.
Thomas Lapp, often called by his clients as “The most organized guy I’ve ever met!”, is the founder and owner of Triad Personal Paperwork Services, LLC, a daily money management firm. In 2016, after an education in engineering and nearly 30 years as a computer engineer in information systems, Tom chose to use his organizational, financial, computer and teaching skills to help others in the area of personal finances. He is a member of the American Association of Daily Money Managers and is active in the local regional group, as well as several Association committees. He can be reached at (484) 778-4370 or firstname.lastname@example.org.