Financial advisors in the pro bono space are connecting with one of the industry’s most underserved populations: those who’ve been released from prison, whether they have served their time or were exonerated and set free.
When incarcerated people are released, they’re often thrust into a situation in which they lack the means and skill sets to form a firm financial footing. This precarious position contributes to recidivism.
A prison term stretching years or decades can devastate someone’s credit, and they may struggle to open basic bank accounts or qualify for Medicare and Social Security, leaving them without the health and retirement security most Americans rely on in their later years.
In situations whenan inmate is found to have been wrongly imprisoned and released, they may get no financial compensation for their hardship. However, even if they do, the rapid influx of new money creates a whole different set of problems, according to Jared Jones, a Virginia-based partner and senior advisor with Omega Wealth Management, who works with
Jared Jones works with exonerated clients through the non-profit After Innocence.
“Ostensibly, people like this are who the wealth management industry wants to work with, with multimillion-dollar windfalls,” he said. “But I believe there’s an important element to working with these people on a pro bono basis to build that trust for someone who’s been taken advantage of via society and the system for a long, long time.”
Lost Wages and Opportunities
According to a study from the FWD.us Education Fund, formerly incarcerated people lose an estimated $111 billion in wages each year due to limited job opportunities, and the U.S. Chamber of Commerce found that, on average, six out of every 10 formerly incarcerated individuals in the U.S. are jobless as measured from their release to four years afterward. (The organization compared this rate to the general population’s peak unemployment rate during the COVID-19 pandemic of 15%.)
The broader challenges facing exonerees led Jon Eldan to form After Innocence in 2014 after assisting clients in similar situations on a pro bono basis for the prior 10 years. According to the organization, about 3,600 people have been exonerated since 1989 (totaling over 32,000 “lost” years incarcerated), with another person exonerated every 56 hours.
In addition to advocacy work in states to establish compensation statutes and mandatory post-release support, After Innocence has worked with over 800 exonerees since its founding on a range of issues, including medical and dental care, as well as pro bono legal and social services. Eldan said he wanted to include financial counseling in the services After Innocence offered, but the diversity of exonerees’ individual challenges made it difficult. The organization opted to partner with the Foundation for Financial Planning to find advisors able to work on a pro bono basis with recent exonerees.
On a trial basis, volunteer CFPs (like Jones) would run several Zoom meetings with an exoneree. Purposefully, they didn’t design the meetings to cover a full course of financial literacy, but rather to focus on several of each exoneree’s main goals and pain points. The organization also partnered with Wealth.com to offer free estate planning services, including will creation, and automatically crafting healthcare directives and medical Powers of Attorney.
“Our estate planning offering has been really popular, and we’ve really urged people at all levels to do it, because it’s such a clarifying process to do a will,” he said. “And it really gets you in the mindset of thinking about planning.”
After Innocence began partnering with the FFP in 2022, which has since awarded the organization more than $135,000 in grant funding, using the money to serve 140 clients and engage 43 advisors in pro bono work in the interim. FFP doesn’t work directly with clients; instead, it partners with groups like After Innocence and provides conduits to advisors.
According to FFP President Jon Dauphine, in addition to leaving prison without decades of payments into Social Security, many middle-aged (or older) exonerees will have chronic health conditions that were ill-treated in prison, making health insurance all the more critical upon release.
Exoneration Doesn’t Mean a Clean Slate
Although many assume exonerees receive exorbitant restitution payments upon release (or due to litigation), Dauphine stressed that this wasn’t always the case; even if they do receive such payments, the sums (and the publicity often accompanying them) can attract predators attempting to take advantage of the exoneree.
“You can imagine if someone doesn’t know much about money and suddenly, they have a million dollars, but that million dollars has to pay for their retirement and their health care because they’re not going to get Medicare,” Dauphine said. “You can only imagine how important it is to preserve that nest egg.”
Jones’ interest in helping exonerees arose during the COVID-19 pandemic, when he listened to a podcast detailing the Innocence Project’s work with exonerees. Jones called such a situation “the greatest injustice,” and felt that while there was advocacy on releasing innocent people from prison, there wasn’t as much focus on what came next. After several years of fits and starts, Jones connected with After Innocence through FFP.
“I’m like, ‘Man, it’s meant to be,’” he said. “Here’s all the structure and everything that goes into working with these people prebuilt.”
Working pro bono is essential with exonorees with cash settlements, as they know the advisor isn’t working with them with any hopes for an immediate payout, especially since many are “understandably” guarded due to their experiences in prison.
“We’re screwing these people as a society, locking them away for many decades, and then on the back end saying, ‘Oh, since you didn’t work, you didn’t get Social Security, you don’t get Medicare, and because you have all this money, you don’t qualify for Medicaid,” he said. “It’s really disappointing to be aware of that.”
The Challenges When Starting Over
Though exonerees face a myriad of challenges upon release, those who have been incarcerated and released after their sentence ends can face the same issues without potential settlement payments.
Kevin Connaughton, a co-founder and president of the Rhode Island-based firm RhodeWay Financial, initially became involved with the state’s Deferred Sentencing Program, which allows individuals to avoid prison sentences by fulfilling specific mandates, including financial literacy training.
Afterward, the firm partnered with the Phoenix Odyssey Project, a Rhode Island-based post-release program designed to help individuals leaving prison avoid recidivism. The program works with individuals while they are incarcerated to develop job skills and address other re-entry issues. Connaughton and advisors at Rhodeway Financial began working with clients, both pre- and post-release, on basic financial planning.
“With the population that we work with, there’s a trust factor that’s usually missing when we first show up. A lot of the lower-income and incarcerated people, they don’t trust the banking and financial systems,” he said. “So we use the financial literacy classes we do to demonstrate our expertise in this area and start to build that trust.”
Kevin Connaughton and his team at RhodeWay Financial work with clients, both pre- and post-release, on basic financial planning.
According to Phoenix Odyssey CEO Kathleen Carty, about 47% of Rhode Island’s incarcerated would be back in prison within three years. Among those in Phoenix’s program offerings, that percentage is approximately 17%.
The program offers business development and nutrition assistance, and Carty acknowledged the financial element was “key” for someone’s success after they had been released from prison. According to Carty, the discussions ranged from day-to-day needs to the desire to buy a house for their family.
“It’s been a big mind shift for people to say, ‘I’m going to plan for a future financially, including intergenerational wealth, but also I want to have good credit,’” Carty said. “Eight years ago, we weren’t hearing people talk about their credit. Credit wasn’t a thing because they weren’t going to need it. And now they do.”
According to Connaughton, the sessions held with Phoenix Odyssey participants at Rhode Island’s Adult Correctional Institution this year were “probably the two liveliest” in the three years the firm has participated in the program. The hope is that they can continue working with the participants after they’re released from prison.
To Dauphine and the FFP, helping both After Innocence and the Phoenix Odysssey find advisors to partner with is a benefit for those leaving incarceration and for everyone.
“It’s a positive for society when folks get out from serving their sentence, or they’re exonerated, if they can get access to these services,” he said. “It really is meaningful.”
