Charitable giving continues to be important to affluent households. These individuals are looking to their financial planners for guidance on using their resources well to support meaningful philanthropic causes and organizations. However, research shows that financial advisors counseling these clients too often either fail to address charitable giving or approach the subject poorly and with many reservations. This is a missed opportunity, as financial advisors are uniquely positioned to play a critical role in developing clients’ giving plans.
You have the knowledge, resources, and desire to work with advisors and their clients on charitable gift planning. If you understand the common hesitations advisors have when it comes to gift planning, you may be able to change minds and build relationships in a way that benefits all—your organization, philanthropically minded individuals, and the advisors themselves.
Why aren’t financial advisors engaging in philanthropic planning?
Financial planners cite many reasons for their reluctance to include charitable giving in conversations with clients, including:
• Unclear boundaries. Financial planners worry that conversations about a client’s philanthropic interest may be too personal or appear unprofessional.
• Insufficient knowledge. Overwhelmingly, advisors cite a lack of training and feel that charitable planning is beyond their scope of expertise. The Charitable Aid Foundation (CAF) surveyed over 200 financial advisors and found that only 5% felt very confident discussing philanthropy.
• Concern over optics. Despite a stated lack of training, advisors fear that turning to outsiders for help may reflect poorly on their ability or even drive clients away.
How can you help make gift planning more appealing to financial advisors?
You have the opportunity to use outreach and education to help financial advisors move past any misgivings about gift planning.
1. Actively build relationships with advisors in your area
Reaching out is the first step. Create a plan for regular communication with financial advisors using all the channels you’re comfortable with—your website, social media, emails, in-person conversations or seminars, or a newsletter designed to keep advisors up to date on various planned giving topics.
2. Emphasize client expectations regarding philanthropy and financial planning.
Clients want their financial advisors to discuss philanthropy and take the lead in charitable planning. The younger generations, in particular, want their advisors to help them think through ways to leave a lasting legacy.
3. Illustrate the mutual benefits of including charitable giving in financial planning.
Including charitable giving in client discussions is good for an advisor’s business. It helps advisors get to know their clients better and build closer relationships with them. Conversations around giving foster trust, build rapport, and encourage client loyalty, leading to more referrals.
4. Coach advisors on specific ways to better engage in conversations about philanthropy.
When financial advisors approach conversations about philanthropy, they predominantly take a technical perspective, focusing on the tax implications of giving. High-net-worth donors desire a more holistic approach. Encourage advisors to ask open-ended questions about a client’s charitable intent and involvement and their vision for utilizing and distributing their wealth.
5. Offer help and resources.
Assure advisors that they don’t need to be experts on philanthropy to engage in discussions on charitable giving. Make sure they are aware of all the ways you can help answer questions, provide guidance on options and next steps, or even make educational and other resources easily available.
It’s important to encourage financial advisors to include gift planning conversations as part of overall financial planning discussions. You stand ready and eager to work with advisors as they help clients fulfill their charitable goals, making them feel prepared and confident when they do so. Reach out and let them know.
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