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Money Matters

A San Francisco startup offers a service for reducing workplace stress that concentrates on head, heart, and hedge funds. Learn how Financial Finesse teaches employees to take control of their money — and their lives.

In the days and weeks following September 11, companies located around the corner — and around the globe — from ground zero urged employees to utilize corporate counseling services, to purge their fears and worries with on-call psychologists before attempting business as usual. Thousands of people used the opportunity to vent their anger and anxiety about flying, big cities, and terrorists. They also talked about money.

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Not surprisingly, money has become a hot-button topic for many crisis counselors during the past few months. As news of layoffs, company closures, and stock-market tumbles followed on the heels of terrorist reports, people began clutching their pocketbooks with quivering hands — and looking for advice wherever possible.

“People felt they were drowning in a lake filled with 2 feet of water,” says Daniel Kegan, attorney and organizational psychologist at Chicago’s Kegan & Kegan Ltd. “When you receive reams and reams of information all at once, you’re not going to function very well. You’re going to stress out — about terrorism, bankruptcy, whatever.”

And when employees stress about money, work suffers. Amy Faunce, an account executive at Concern: EAP, an employee-assistance program (or EAP) based in Mountain View, California, says that economic anxiety disrupts the workplace because distressed employees are more likely to spend on-the-clock time sorting out credit-card debt, researching investment opportunities, and arguing with significant others. Those distractions, she says, threaten an employee’s productivity and an employer’s bottom line.

That is precisely why Concern recently signed on with Financial Finesse Inc., a San Francisco startup that educates employees about 0% financing, Roth IRAs, hedge funds, and countless other intimidating, mystifying money matters. An independent content company without ties to any banks or investment houses, Financial Finesse touts its service as unbiased and unmotivated by commissions, referral fees, or advertising revenue. Its mission is simple and long overdue: to teach generations of uninformed, unprepared Americans about their money — or lack thereof.

The Money Changer

Liz Davidson didn’t set out to spark a gender uprising. It’s just turned out that way.

While attending the Anderson School of Management at UCLA, the ambitious investment banker hatched the idea for a hedge fund for high-net-worth investors. She recruited a broker friend from New York to help establish a hypothetical portfolio, and before she knew it, Davidson was managing the sales, marketing, and strategy of her own fund, Davidson Andrade LLC. All before her 26th birthday.

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“In the process of presenting at conferences, I noticed that I was one of very few women actively involved in the investing community,” says Davidson. “Everyone who ever called us, heard of us, or wanted to invest with us was a man. It started to eat at me. Why weren’t women getting financial information that mattered? Why weren’t they as passionate about investing as I was? What was going on?”

Frightening statistics began to stack up: The U.S. divorce rate hovers around 50%. Most divorced mothers win custody of their children. Women make 76 cents for every dollar earned by men in the same job, and they live seven years longer. In short, women must stretch less money across a longer retirement than men. “We don’t talk enough about how the women of the baby-boomer generation are neglecting to save enough for retirement,” Davidson says. “Amid all these advances in medical care, no one is asking, ‘How are you going to support yourself through 25 years of retirement?’ “

Davidson, now 30, started conducting free weekend seminars, which she called Financial Finesse, for women who wanted to learn about stock portfolios, IRAs, and smart investments. She packed the house each time. Soon, attendees began sending their sisters, roommates, and mothers to the forums. As the seminars grew in popularity, Davidson says she encountered a conflict of interest that challenged her own capitalistic tendencies. “How could I spend all this time educating women about their money and then say, ‘But the best alternative is my hedge fund. Don’t invest your money anywhere else’? I couldn’t cross that line and maintain my credibility as a teacher,” she says.

Then one morning in early 1999, Davidson’s partner called her from the hedge fund’s New York office. She answered the phone “Financial Finesse, this is Liz.” “That was really the beginning of the end,” she says. “It was like calling your boyfriend the wrong name. We both realized that my head and heart were no longer with Davidson Andrade LLC.”

Compounding Interest

Davidson began her new venture with a seminar that explained how to create a budget, amass an emergency cash reserve, and begin saving for retirement. From there, she tackled investing, navigating tax laws, and selecting mutual funds. Open to women and men alike, these seminars drew upwardly mobile San Franciscans who had trouble reconciling their spending habits with their paychecks. Many were sinking deeper in debt with each raise, Davidson says.

Expanding its services beyond seminars, Financial Finesse soon began signing corporate clients. Companies and EAPs added financial counseling to their rosters of services by enrolling workers in Davidson’s seminars, connecting them to the Financial Finesse help line, and empowering them to take control of their money. Financial Finesse now employs about 35 people in its San Francisco headquarters. Though it targets Fortune 1,000 companies, Financial Finesse’s client list now includes firms ranging in size from 5 employees to several thousand. Concern is one of the larger clients, with roughly 250 high-tech, government, and biotech organizations under its umbrella.

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“September 11, combined with the recent economic downturn, has caused a lot of personal anxiety in the workplace,” says Faunce, whose organization hired Financial Finesse on October 1. “So far, we’ve received tremendous feedback from our clients, who say Financial Finesse is providing relief for overwhelmed employees — allowing people to focus on the job at hand, rather than on personal financial problems.”

According to ComPsych, more than one-third of employees say that personal finances cause them the most stress at work — not an entirely surprising statistic considering that 50% of U.S. workers have not started saving for retirement. Financial Finesse estimates that more than 33 million baby boomers may face destitution after 65 due to poor financial planning and extended life spans. That statistic is likely to grow following the September 11 attacks and the current recession, Davidson says.

“In a perverse way, this ailing economy is the best thing for our business,” she says. “In 1998 and 1999, people would argue with me about whether long-term investing made more sense than day trading. They would ask me, ‘How is your portfolio? I’ve invested in Yahoo, and it’s gone up 400%!’ Now those people understand that they do need a financial education — and fast.”

Becoming Personally Invested

Today, financial planners and counselors working with Financial Finesse are fielding questions like these: How much money will I need to stay afloat while I look for a new job? Should I continue to invest in the stock market? How can I decrease my debt? What happens to my 401(k) if I get laid off? Should I refinance my mortgage?

Expert advice, Davidson says, serves to educate employees and quell fears during this high-anxiety era of mounting layoffs and erratic market behavior. “There is a therapy element to financial planning” that meets the individual needs of unique consumers, she says. That is precisely why Financial Finesse disperses its information and guidance through various content channels — different strokes for different folks.

The company’s live, instructor-led seminars meet across the country, from Memphis and Minneapolis to Atlanta and Seattle. Seminar topics include long-term and elder care, stock selection, car buying, and debt refinancing, among others. Financial Finesse’s internal team of writers, programmers, designers, and other creative folks (including one former Hollywood producer) has also developed online courses covering seminar content. Davidson reigns over the company’s new radio show, broadcast each Friday on the Bay Area’s AM business station, KDIA.

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The employees of client companies like McCann-Erickson and Reebok also gain access to the Financial Finesse help line, which offers unlimited assistance from its outpost in Madison, Wisconsin. There, four Financial Finesse advisors answer wide-ranging money questions and provide referrals to licensed financial planners — 170 prescreened private practitioners who are scrutinized, interviewed, and continually evaluated by Financial Finesse.

“We crave human connections with experts — whether they are therapists or financial planners — who can sit down, work us through problems, help us understand what we’re doing wrong, and tell us it’s going to be okay,” Davidson says. “Even for companies with limited budgets, financial assistance is increasingly necessary and cost effective in terms of the morale boost and the productivity boost for employees. That return on investment is especially true now.”

Anni Layne Rodgers (arodgers@fastcompany.com) is the Fast Company senior Web editor. Contact Liz Davidson (ldavidson@financialfinesse.com) by email.