Advisers falling short when it comes to talking philanthropy with clients: Survey

Though most advisers do address giving, many clients walk away unsatisfied
NOV 26, 2013
Want to engage your clients and pave the way for a long-lasting relationship? Try discussing their philanthropic goals. Though nine out of 10 financial advisers, and trust and estate attorneys, discuss philanthropic giving with their clients, many of them are doing it wrong. At least that the finding of a recent study of 312 advisers, attorneys and accountants by U.S. Trust Institutional Investments & Philanthropic Solutions and The Philanthropic Initiative, a consultancy on giving. The study found that even though 89% of the financial professionals polled are having the philanthropy conversation with some of their clients, only 41% of high-net-worth individuals are satisfied with these discussions. That might have something to do with advisers' approach to the topic, said Claire Costello, national philanthropic practice executive for U.S. Trust. “Clients don't care who is initiating the conversation as long as it's brought up in a meaningful, holistic sense,” she said. “They don't just want the tax benefits or the technical conversation. The initial takeaway is for advisers to ensure that they're approaching this from a holistic point of view.” Indeed, 71% of the polled advisers and attorneys said that they bring up philanthropy from a tax planning or wealth structuring point of view, while only 35% approach the issue from a discussion of either the client's goals or passions. There are a number of possible reasons why advisers are unlikely to tackle charitable giving from a point of view that engages the client's emotions. “Some advisers aren't experienced, but others don't think it's their job to talk about the client's ideals. Some think they're sermonizing if they talk about it,” Ms. Costello said. “They may not feel that they're in the position to counsel or they don't have the network to direct those funds.” Advisers could consider talking about their own philanthropic engagement, she added. Not only does the charitable-giving conversation strengthen ties with clients, but it also allows advisers to get acquainted with family members as they hammer out the end goal for use of a family's assets. “Advisers can ask, 'What are your values as a family? What do you hope this can do for your children?'” noted Jim Coutre, a partner with The Philanthropic Initiative. “These questions are inspirational; tax planning isn't,” he said. “[The philanthropic discussion] provides insight into the client, and you build deeper connections, end up with a more satisfied client and get a better understanding of their needs.”

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