Philanthropy has a way of giving back to everyone involved, including the financial advisor who talks with clients about charitable giving, advisors say.
Those who give often say they receive more in return than they are giving. But philanthropic planning also can help advisory practices expand and to create a solid base among the family members of clients, several advisors say.
Krystal Kiley, vice president, relationship and practice management at Fidelity Charitable, a donor-advised fund, recounts the experience of two high-net-worth women who are friends. One is a financial advisor.
The two were discussing charities and giving back to the community recently when the financial advisor found her friend’s advisor was not helping her with the philanthropic goals, and did not even know what her goals were.
The two friends soon also became advisor and client and the friend proceeded to refer more people to her new advisor. The advisor found assets her friend was not using efficiently and turned that newfound knowledge into ways to give more to charity.
“Not only did the advisor gain a new client and new referrals, the friend’s original advisor lost a client and the referrals, which illustrates how philanthropic advice can be used to build practices,” says Kiley.
Kiley is head of the Charitable Planning Practice Management program at Fidelity, which gives advisors resources they can use to help clients give to charity more efficiently, she says.
The conversation can start with the tax code and the advantages the client can gain by donating the right assets, but giving can benefit the advisor as much as the donor, says Kim Laughton, president of Schwab Charitable, a donor-advised fund.
“When advisors open up the philanthropy conversation, they get to know their clients in a deeper way,” says Laughton. “Two-thirds of advisors are looking for ways to differentiate themselves from the competition. High-net-worth clients are increasingly demanding more philanthropic assistance from their advisors.”
Advisors can help their clients give the right types of assets in the most efficient way, and in the process endear themselves to the clients, she adds. “Advisors who are not current with their information will have a hard time helping their clients. It is almost malpractice to not bring up philanthropy with the clients,” she says.