More wealthy individuals who have financial advisers are donating to charity at higher levels than their advisers estimate. But the gift-givings also provides a great opportunity for advisers to reel in more assets. Relationship.
Acording to Fidelity Charitable's 2012 “Advice & Giving” study, advisers estimated that less than half of their clients with at least $1 million in investable assets make annual charitable contributions. They also said that a little more than half of their clients gave $2,500 or more to charity. A survey of investors with financial advisers, however, found that 93% of respondents claimed to make annual donations to charity. Indeed, half of the clients surveyed gave between $5,000 to $100,000 or more each year.
That's a sizeable gap between perception and reality. But Sarah Libbey, president of Fidelity Charitable, said
charitable giving presents a huge opportunity for advisers. “Advisers who take time to talk about this important financial subject are tapping an opportunity to better understand their clients and their immediate and long-term goals,” Ms. Libbey said. “It's also an opportunity that can ultimately result in bringing in more assets for the advisers to manage.”
Advisers can benefit from
charitable giving as well. For Brown Brothers Harriman of New York, it is a key priority for many of its clients, said senior vice president, Alina Montes.
“Offering guidance in this area helps clients maximize their giving and enhances our relationship with them at the same time,” Ms. Montes said. “It is one of the ways we differentiate ourselves as a firm.”
According to the survey, nearly three-quarters of advisers with clients averaging at least $1 million in investable assets said charitable planning helps to build relationships with clients, and more than half of surveyed advisers have found that it helps position them as a broad financial expert. Additionally, offering financial strategies for charitable planning leads to multi-generational relationships with clients and helps to win referrals from them.
Fidelity Charitable conducted the survey of 500 financial advisers and a survey 183 wealthy individuals online in March.
