By Gabe Maechaoui ‘16
More often than not, people associate finance and its career prospects with stereotypical areas of finance such as investment banking, venture capital or real estate. Finance and its closely related academic fields are unfortunately often associated with greed. It is very much a service industry, we don’t produce anything, instead we offer services to those who are willing to pay for them. For example, companies and individuals can manage a person’s portfolio of securities but will then charge commission fees, take a percentage of the returns and so forth. As a result, they would simply be creating money for themselves directly from someone else’s wealth.
Many people also don’t understand that there is very much so a micro side of finance that concerns household income for families. For example, in an average household, people’s biggest concerns are typically paying their bills, managing debt and keeping credit balances under control. Merrimack College’s Finance Department saw a clear and present need in Lawrence, Massachusetts for a program to assist those who may not be that well versed in finance to help educate them. Under the leadership of both ACT Lawrence and Merrimack College’s Finance Department, we have launched and created a pilot program for a Financial Capability Center.
Our Financial Capability Center has been actively working with ACT Lawrence and Merrimack College’s Hands to Help program at St. Mary’s church in Lawrence. Our center creates and presents workshops concentrated on relevant topics geared towards financial literacy and capability. Throughout the semester, each student coach works with two clients and helps to assist them with any questions or challenges they may face. As students we work as financial coaches and not true advisors as we of course are not licensed. As a result, the experience between the student coach and client is very much client driven. During the initial workshop and client meeting, our clients presented their current financial challenges and the goals they hoped to achieve. From there, the student coaches worked to keep their clients on track, performing regular check-ins, researching questions, and ultimately acting as a resource to them.
In addition to working with clients, our center also spends time analyzing and studying the resources and financial institutions already present in Lawrence. We have been surprised by the prevalence of alternative (fringe) financial services that are not in the best interest of our clients. For example, pawn shops are aplenty in Lawrence and regrettably so are checking cashing shops. Unfortunately, the citizens of Lawrence and others often depend on these alternative financial services since they remain excluded from mainstream service providers. Alternative financial services exist because typical commercial banks will not lend to those with poor credit ratings. As a result, the void is filled by financial service providers that charge predatory interest rates and high fees as well.
Beyond our work in Lawrence, we are offering insight to students and faculty members here at Merrimack College as well. We offer drop-in hours for our center in O’Reilly for those who have specific questions, or for those who are interested in getting involved for the following semester.
We invite all those who are interested in becoming a part of our program to stop by our center drop in hours. Our next ones are 4-6 PM on November 12th and 19th in our center on the second floor of O’Reilly. Finally, for those who would like to become a coach, we ask that you email Dr. Silva your resume and a cover note on why you would like to be one. We hope to see you soon at our center!