6 Questions to Ask a Prospective Daily Money Manager
Many seniors benefit from the services of a daily money manager (DMM), but it may seem daunting to hand over your confidential information to a stranger. Most daily money managers are trustworthy, caring people, but it is important to do some due diligence to ensure a prospective DMM will be a good fit.
I recommend starting out by asking friends, family, or financial or legal professionals for referrals to a trustworthy DMM. If that doesn’t produce a good fit, the American Association of Daily Money Managers (AADMM) has an online directory to help you find a DMM in your area.
Once you find potential DMMs, it’s important to do your research on them and have some in-depth conversations to learn more about them. Here are a few questions to get you started.
1. What services do you offer?
The vast majority of DMMs help with mail management, bill payment and tax organization, but some go further.
For example, at Everyday Money Management we help with insurance claims, budgeting and utilizing a Whole Life List to fully document our clients’ financial lives.
You want to ensure the DMM can fulfill all your needs, especially if you, or a senior loved one, are dealing with significant medical issues.
2. Are you part of AADMM or CDMM Certified?
Unlike lawyers or financial advisors that must maintain professional accreditations, there is no governing body for daily money managers.
There is a process to become a Certified Daily Money Manager (CDMM), which requires 1,500 hours of service and passing an exam. More than anything, this certification shows a commitment to being a DMM and to on-going excellence.
That doesn’t mean you should eliminate a prospective daily money manager if they aren’t certified. There are many wonderful DMMs who may not have accumulated the hours required to be eligible for the exam. If that’s the case, ask them about their experience and the training they received to become a DMM.
You may also ask if they are part of the American Association of Daily Money Managers (AADMM), whose members undergo a background check every 2 years, adhere to a code of ethics and standards of practice.
3. Are you insured and bonded?
Any DMM you consider should be insured. At a minimum, your DMM should carry professional liability insurance, but if they are coming to your home, they should also have general liability insurance. Don’t be afraid to ask for insurance certificates to verify the limits of their liability.
If the DMM you are considering is an employee of a company, they should be bonded and the company should carry workers compensation insurance.
4. Are you part of a company or do you work on your own?
There are a few of benefits of working with a company over an individual, such as:
Continuity of service
In the event that your regular DMM is unavailable for a period of time, you want to ensure there will be someone to help you. When a DMM is part of a team, there are layers of support to ensure your needs will be met.Wide-ranging expertise
At Everyday Money Management, our DMMs have a breadth of knowledge around personal finance, including Medicare and other health insurance, credit, taxes, and using financial technology. Our team is made up of seasoned professionals with backgrounds in law, accounting, banking, technology and more. Many have fulfilled the role of DMM in their own families before coming to Everyday Money Management.
On-going security
Every member of the Everyday Money Management team has gone through an extensive background check and multi-step hiring process. We conduct constant background monitoring and put a number of safeguards in place to ensure the integrity of every member of the team.
If you have found a DMM that you feel good about, but is a solo practitioner, ask to see a recent background check report. Be sure to find out about their support structure and what happens if they are unavailable for a period of time and you need help.
5. How do they work with your other service providers?
Daily money managers don’t replace your financial advisor, accountant, or lawyer. They should work collaboratively with them.
When interviewing a prospective DMM, ask them about their experience working with other service providers and how they would collaborate with your existing support system.
6. How do I know I can trust you?
Ultimately, this is what it all comes down to, and it’s the hardest thing to determine. When I’m asked this question, my honest answer is that there is no way to be 100% certain that a person is trustworthy.
It is important to do proper vetting, such as asking the questions above, talking to people who have worked with them, and even doing a Google search on the person.
Beyond that, you’re going to have to go with your gut. Once you make a decision to go forward, you’ll want to take the approach of trust, but verify.
Ideally, there would be a third party, such as a family member or trusted accountant that can occasionally check the accounts to ensure everything is above board.
That should not offend your DMM. In fact, part of our job in protecting our clients is to check up on the other service providers. It’s only fair to expect they would do the same kind of due diligence.
Another option is to start small. Rather than giving a new DMM access to everything at once, give them access to a limited number of accounts for a month or two. That will allow you to get a sense of how you’ll work together before passing over the keys to the kingdom.
If you’d like to discuss if one of our DMM’s is right for you, please contact us.