Philanthropy a growing part of advisory relationship

U.S. Trust study finds clients are less interested in tax benefits than advisers may think

Jul 19, 2018 @ 12:35 pm

By InvestmentNews

More advisers and their high-net-worth clients are discussing philanthropy these days, but clients are less motivated by the tax benefits of giving than advisers believe, according to a study by U.S. Trust.

The survey found that a higher proportion of advisers (80%) ask their clients about philanthropy today than in 2013 (71%), when the survey was last conducted. It found that the vast majority of advisers (94%) discuss philanthropy with some of their clients, including 44% who discuss it with a majority of their clients.

"Advisers correctly gauge clients' top motivations for giving — having a passion for a cause, wanting to impact their community and the desire to give back — but they misperceive the importance of reducing taxes and enhancing the family name or business as motivations," U.S. Trust said in a release about its Study of the Philanthropic Conversation.

In assessing the potential impact of the 2017 Tax Cuts and Jobs Act on giving levels, the study found that only 7% of donors plan to decrease their giving, compared to 16% of advisers who anticipate a reduction from clients.

The survey found that wealthy individuals who consult their advisers about their philanthropy are more structured in their giving and that adviser-client discussions about philanthropy can enhance the perceived value of the adviser. Two in five HNW individuals would be more likely to select an adviser who is knowledgeable about charitable giving, and 53% place more value on information from advisers who are philanthropic themselves, the survey found. In addition, 59% of clients report wanting their adviser to refer them to another professional for complex philanthropic needs beyond their adviser's capabilities.


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