Advisors struggle with an inherent dilemma when helping their clients make gifts of significant sums to charity. They’re reluctant because the more their clients give, the less money advisors will have to manage, right? Wrong. A new study shows it’s worth overcoming the reluctance.
More than three-fourths of advisors say they noticed a positive impact to their bottom line after talking with clients about philanthropy, according to a 2018 U.S. Trust study. That’s because, in part, these discussions foster trust overall, as well as build loyalty with younger clients who want to prioritize social-impact investing. It’s also a vital service for HNW clients who need sophisticated tax strategies.
“Clients want guidance from their advisors about how to vet and select causes, but many advisors are unaware or unprepared to meet this need,” writes Financial Planning Senior Editor Kerri Anne Renzulli in “Help clients give away more of their money – Yes, really.”
How should an advisor go about meeting this need? Build trust, first, Renzulli urges. Clients may be wary of being judged for how little they give, or to which causes. Then, lead by example. Daniel Andrews, the founder of planning firm Well-Rounded Success, asks clients to help him select the charities he supports.