Daily Money Management is an unfamiliar profession to many. To demystify the practice, we'll try to answer a few questions you might have.
You can also read more about Daily Money Management in the AARP's description. It is about four years out of date, but other than inflation little has changed - except that membership in the American Association of Daily Money Managers (see below) has grown. This summary from Money Crashers will also reinforce the information below.
Professional Daily Money Managers come in many forms, but at their core they are all involved with taking over someone’s day-to-day financial tasks, either in part or in their entirety. They are charged with helping to ensure that everything is followed up properly and promptly, with a scope of responsibilities ranging from gathering tax information for use by a tax professional in preparing tax returns to handling ongoing bills to working with medical and insurance bills and insurance companies.
For those with a need, whether due to time pressures or other limitations, a daily money manager can be essential in helping to ensure that accounts are kept current, creditors are kept at bay, insurance remains active, and fraud prevention measures are in place.
A succinct overview of what DMM’s are and what they do can be found on Investopedia. Many professional DMM’s are also members of the trade’s professional membership organization, the American Association of Daily Money Managers.
It’s worth noting that a DMM does not replace your Certified Professional Accountant (CPA), your Certified Financial Planner (CFP), your attorney, or for that matter your gardener or your electrician. Rather than replacing those professionals, a Daily Money Manager takes on responsibilities that you yourself would otherwise have borne. In that capacity, they work with these other professionals, not instead of them.
Note that Bedrock Fiduciaries offers both daily money management and trust administration services, operating as a California Licensed Professional Fiduciary.
Money management, so fundamental to navigating daily life, confounds many… for many reasons.
American schools arguably provide a weak foundation for many of us, as they cover so little about how the tax system works, the fundamentals of budgeting, and the basics of investing. We often enter our adult lives with little grasp of distinctions between things like cash flow and profitability, the nuances and implications of a progressive tax code, no appreciation for the power of compounding.
As adults, though, many other things conspire to make solid daily money management an ongoing challenge – many exacerbated by the aging population, which means a growing population of aging parents with finances that need attention. Here are but a few:
- Heavy travel schedules.
- Intense workloads.
- Added responsibility for a dependent – be that a dependent child, a dependent parent, or someone else (protecting elderly parents finances is an increasingly relevant challenge as the Baby Boomers continue to flood the ranks of the retired).
- Confusing lingo when working with insurance companies.
- Similarly confusing lingo when working with investment advisors.
- Illness, of yourself or another.
- The challenges associated with loss, ranging from loss of a job to loss of a spouse.
- Life transitions, whether the birth of a child, marriage, retirement, or any other transition requiring a major adjustment and new responsibilities.
- Busy schedules that leave people with more money than time.
The list goes on and on, of course, but the principle is the same: many people find themselves in need of help. Others may not need help – but find they would quite like some help! Have you ever come home after a busy day, looked at the stack of bills waiting for you, and simply thought, “I should just hire someone to pay my bills!” Many people have, and professional Daily Money Managers are perfectly positioned to help.
The short version is simple: DMM’s don’t just provide money management services for seniors – we help a wide range of people.
If you think you might need (or want) a Daily Money Manager (DMM), or for that matter if you have a parent or ailing relative who you think could use one, there are a number of things to consider.
First, we advocate checking their affiliation with the trade’s professional association, the American Association of Daily Money Managers (AADMM). We believe this reflects their commitment to the profession, and to the professional standards put forth by AADMM.
Second, as with any business these days, we recommend that you check them out online. See what kind of services they promote on their website, the degree of professionalism reflected in their online presence, and any visible commitment to ethical standards. Are they insured? Bondable? They should be both insured and bondable.
Related to ethical standards, the third thing we advise looking for is a strong commitment to privacy and security. There are no foolproof solutions, but in the modern world we all live in cybersecurity is an ever-bigger issue… and your DMM will be handling a lot of sensitive information on your behalf… or your parents’ behalf (financial services for seniors are rife with opportunities for fraud). Make sure you are comfortable that the DMM you select can properly protect your interests from all manner of threats: fire, theft, employee fraud, hacking, data breaches.
The final thing to consider may be the most important for many: fit. Most DMM’s will be happy to get on a call – or, these days, a video meeting like Zoom – for an initial discussion. Are they someone you can work with? Do you feel you can trust them? Sometimes you learn more from these brief interactions than you do from all your background work.
To find a DMM in your area, we suggest you begin with the “Find a DMM” feature on the AADMM website, found here.
The good news is that you will generally find professional Daily Money Managers to be an honest lot that will work hard for you. Still, we like to think we have our edge (as we’re sure our competitors do).
Our goal is simple: do it better, do it more efficiently, and do it more securely.
Our secret lies in how we do it. Elsewhere on this site you can read about our proprietary, bespoke fiduciary system – which greatly enhances our efficiency and accuracy – and our enterprise grade data security. Here we’ll tell you a little about our process and its implications for our clients.
To begin with, there are a few core operating principles you should know:
- First, the data we organize and monitor remains the property of our clients. Even the data loaded into our proprietary fiduciary system. If for any reason a successor assumes responsibility for the affairs being handled, or they return to the client, we provide all the data in a .csv or Excel format as part of the handoff. Of course, any files kept in hard copy – such as identity documents (birth certificate) or a year-end summary for an investment account, will also be turned over.
- Second, while we manage client data, track activity, maintain online account access, and perform other tasks within our propietary system, we also establish and maintain a Quicken file for each client. This file contains the nitty gritty of each and every financial transaction we manage – and like the system data file noted above, it remains the property of the client. If a successor assumes responsibility for the client’s finances, they get the original Quicken file – complete with embedded copies of relevant receipts.
Our application of these and other state-of-the-art systems also allows us to operate efficiently… without compromising thoroughness. Efficient use of time translates directly into greater value for our clients, and we believe the robust design of our proprietary software solution does as well.
Those are our operating principles. For a sampling of the services we offer, visit our Services page.