As a board member for an HOA in Nevada, you know that financial stewardship is the foundation of good community management
. You might think that revolves around smart budgeting and planning, and you’d be partially right. But strong finances are also the result of implementing smart banking programs and purchasing the right insurance coverage.
Strategic banking should balance growth and security. This allows you to grow your reserves with minimum risk while simultaneously enjoying the liquidity you need for smooth operations. On the insurance front, it’s a matter of purchasing coverage that protects you to the fullest extent without breaking the bank.
With the help of the right community management company, you can create a financial plan that does great things for your community. Look for a company with dedicated branches or departments focused solely on banking and insurance
. Here are some of the questions you should be asking.
1. What part will you play in handling the community’s overall banking and insurance needs?
Serving common-interest communities shouldn’t be limited to order taking. And yet that’s the approach that typical community management companies take. That’s why you should seek a proactive firm, such as FirstService Residential
, with the expertise to plan strategically on your behalf and the resources to put dedicated professionals to work for you.
For banking, look for a community management company that analyzes the interest your current accounts are earning, assesses if the balances you have in your accounts are FDIC insured, and gives you a full accounting of your overall liquidity. The company should review your accounts every month and make recommendations for adjusting them or opening new accounts to better meet your community’s needs.
For insurance, the company should continually review your policies. All too often, associations put their insurance on autopilot, missing valuable opportunities to get the same coverage—or even better coverage—at a reduced rate.
2. How can you save me money?
Communities can always use more money. So make sure your community management company has concrete strategies to help you save on banking and insurance. Look for larger firms with a nationwide footprint
. They will have the buying power to leverage better rates for you, including higher returns on your investments, lower interest rates on your loans, and better premiums on your insurance policies.
3. What are your internal safeguards?
Working with a bigger company can give you more peace of mind because it has the staffing resources to segregate duties like accounts payable and accounts receivable. When a company lacks the manpower to institute these internal controls, it leaves itself open to potential fraud. Furthermore, larger companies are more adept at building the kind of internal firewalls that prevent risk. These practices are strengthened if the company also abides by a philosophy of transparency
and conducts regular internal audits.
4. Can you show me results?
It’s always good to ask for specific examples. Your community management company should be able to provide you with case studies that clearly show what it has done for its clients. For instance, FirstService Residential can demonstrate that it has achieved these insurance improvements:
Reduced insurance premiums for one client by 28 percent, which resulted in an annual savings of $33,000.
Analyzed one community’s insurance needs and procured additional umbrella policies on a per-loss, not a per-unit, basis, a move that represented significant savings.
Reduced policy premiums totaling $50,000 for one HOA after the transition of the property from developer to association control.
For banking, the company has:
Procured banking alternatives for one HOA that increased the association’s revenue by $9,000.
Recommended a change in investments to one client for a portfolio yield that went from 0.06 percent to 0.41 percent.
Consulted with a client to protect a $4 million settlement across four insured accounts while keeping the money liquid and garnering a significant return.
Made investment recommendations to one client that resulted in additional returns of $6,000 annually, thus meeting the needs outlined in the HOA’s reserve study and topping the plan presented by a national brokerage.
Don’t settle for less when it comes to banking and insurance when these areas could be working a lot harder for you. A national community management firm that’s strong in your local market can help. For more information, contact FirstService Residential
, Nevada’s leading HOA management company.
For further information on how a great community management company can help your community, please fill out the form below: