Novel investment contract features automatic charitable giving

The company's contract is an actively managed portfolio of investments that will send 2% each year to one or more charities that the investor chooses.
OCT 05, 2011
By  Bloomberg
Cornerstone Investment Services LLC has created an investment contract that allows clients to contribute to their favorite charities automatically, making it easier — and more appealing — for clients to contribute. The company is offering 25% off its fees for investors in its new Legacy Contract, an actively managed portfolio of investments that will send 2% of each account holder's portfolio each year to one or more charities that the investor chooses. “Over the years, we've seen a number of people looking for a type of structured way to give charitably,” said John Riley, president of Cornerstone, a registered investment adviser with $125 million in assets under management. “Charitable giving can be very haphazard.” The benefit of giving philanthropically through this contract is that Cornerstone Legacy clients still own the assets and can at any time transfer them to the traditional investment contract, Mr. Riley said. “People have trouble giving up control of their assets,” he said. “Here they keep control of their assets.” Investors can choose one of 16 charities that the company has already researched and determined that they use 90% or more of donations for the cause, as opposed to operating expenses. The charities, which include Global Links, MedShare International, Oxfam America and Save the Children, are mostly global groups that focus on targeting hunger and poverty. Investors also can direct the 2% donation to another charity that they stipulate. Cornerstone is hoping to be giving away $1 million a year to charities through the contract by 2016. Achieving that would require about $50 million in assets, Mr. Riley said. The firm, which has nine advisers, is just rolling out the contract. “It's a traditional money management contract, but they are making an agreement to do something for people around the world,” Mr. Riley said. “If someone is philanthropy-minded, this is something they are going to want to do.”

Latest News

Judge OKs more than $90 million in settlement money for GWG investors
Judge OKs more than $90 million in settlement money for GWG investors

Mayer Brown, GWG's law firm, agreed to pay $30 million to resolve conflict of interest claims.

Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs
Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs

Orion adds new model portfolios and SMAs under expanded JPMorgan tie-up, while eMoney boosts its planning software capabilities.

Retirement uncertainty cuts across generations: Transamerica
Retirement uncertainty cuts across generations: Transamerica

National survey of workers exposes widespread retirement planning challenges for Gen Z, Millennials, Gen X, and Boomers.

Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future
Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future

While the choice for advisors to "die at their desks" might been wise once upon a time, higher acquisition multiples and innovations in deal structures have created more immediate M&A opportunities.

Raymond James continues recruitment run with UBS, Morgan Stanley teams
Raymond James continues recruitment run with UBS, Morgan Stanley teams

A father-son pair has joined the firm's independent arm in Utah, while a quartet of planning advisors strengthen its employee channel in Louisiana.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave