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Q&A: The Notary's Role In Financial Planning

Despite the findings of a recent State Farm study indicating less than half of American adults have a financial back-up plan in place, the value of such a plan is undeniable, especially during tough economic times. The Financial And Corporate Services Section recently spoke to Professor Mary Quist-Newins, Director of the State Farm Center for Women and Financial Services and professor at The American College, about the challenges faced by those working in the industry, and the crucial role Notaries play in notarizing related document transactions.

While most consumers recognize the value of having a financial plan in place, a surprising number of Americans are without one. How do you explain this discrepancy? 
The recession has definitely elevated the awareness of the need for financial plans. However, the so-called “Bernie Madoff effect” has in some ways tainted the financial industry and exacerbated an already challenged image. There are some real barriers to planning, many having to do with perceptions. Consumers don’t know who to trust, and with over 270 different professional designations — all that “alphabet soup” behind people’s names — it makes it confusing to navigate. Despite the importance of financial plans, many people still think they are too expensive or won’t work for them. Professionals in the industry have a challenge ahead in changing those perceptions.

When creating a financial plan, what types of documents require notarization?
Of the six areas that should be included in a comprehensive financial plan — financial position, taxes, retirement plans, protection planning and risk management, investments, and estate plans — the areas that intersect most with Notaries involve estate planning and transference of property. This includes trusts, wills, powers of attorneys, affidavits, transfers of real property ownership such as deeds and contract changes such as life insurance. From the transference of insurance policies or pensions to cutting a spouse out of a beneficiary role, any documents transferring assets should be notarized.

Medallion signature guarantees are being required more often when transferring securities from one custodian to another. For example, if I need to transfer stocks from one financial institution to another, I have to sign a deed that proves I am who I am. A medallion signature guarantees identity and is legally binding.

What are some common errors people make when it comes to financial planning?
Consumers often think that buying a product — a mutual fund, life insurance plan, health insurance policy, or an annuity — is having a plan; but it’s not. A plan should let you ask questions and come up with answers: What are the sources and uses of my cash flow? How are my expenses and incomes changing? How will they change if I become disabled? How about if I retire or have a major health issue?

A good plan should focus on the goals of the consumer. If, instead, the planner is focusing more on selling products and services, that’s not a good sign.

What advice do you have for Notaries working within the financial services sector?
The best way financial industry Notaries can be informed is by having their own financial plan in place, created by a qualified professional. That way, they know what they look like and what to expect. There’s a great deal of power in planning.

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Advocacy

30 May 2019

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