If you are thinking about expanding your practice to offer broader and deeper support to your clients, your timing couldn’t be better. A new year is the perfect time to freshen your approach and introduce different topics, tools and resources that can add dimensions to your role as a wealth advisor.
The Time For Philanthropy Is Now
Over the last decade, philanthropy has moved more prominently into the collective consciousness as high-profile givers like MacKenzie Scott and Bill Gates have helped spotlight the key role that thoughtful and strategic charitable contributions can play in addressing society’s most difficult problems. At the same time, younger generations, especially millennials and Gen Z, are driven by purpose and want to align their assets and their actions with their personal values to make a positive impact on our world.
In a recent study that Foundation Source conducted on the founding and inheriting generations of single family offices, we saw distinct differences in each generation’s priorities for philanthropy. The founders were more focused on building and preserving their legacies while younger family members were more passionate about advancing a mission and creating social impact. The beauty of philanthropy is that it can meet all of these objectives. And more.
That gives you an opportunity as an advisor, too. Whether your clients are young or old, if you build your expertise in charitable giving, it will give you new ways to engage with clients and deliver value for them.
If you want to add philanthropy expertise in your practice, we encourage you to assess your strengths in these areas.
Your Mindset
To thrive in this space, you must be willing to think beyond investments for a more holistic approach, even if it means breaking new ground in your practice and relationships.
Consider yourself a steward for your clients’ wealth and long-term objectives, and don’t limit yourself to the products, structures or services you’ve relied on in the past. You will want to start different kinds of conversations with your clients, ones in which you discuss their passions or frustrations—and anything else that might shape their charitable mission.
It can also help you to understand your clients’ family dynamics. If the older and younger generations work on philanthropy together—perhaps by starting or running a private foundation or investing in donor-advised funds—it could strengthen their interpersonal relationships (or aggravate them). The bottom line is that trying something new can feel strange, and possibly out of scope, but it could quickly shift the nature and quality of your client engagement.
Talking Points And Tools
When approaching new topics with your clients, it helps if you have an outline and prompts to guide your conversations and ensure that you’re asking valuable questions and getting meaningful responses. For example, you might come up with an informal list of ideas to spark your dialogue, brief introductory or educational materials approved for client use, and tools from third parties that help clients identify their philanthropic motivations and priorities.
If you’re new to this space, there are many free resources available to help you evaluate charitable vehicles, craft family mission statements and vet charities. You can use workbooks, checklists and calculators to create a starting point or benchmark for future planning.
Technical Knowledge
If you want to give your clients tax-wise advice, you’ll have to be fluent in several topics: tax planning; estate planning; charitable vehicle evaluation and selection; and asset management within endowments. (If you aren’t, you’ll need team members who are.) If you are versed in these topics, you’ll be able to work across both the taxable and the tax-exempt side of clients’ investment portfolios, constructing cross-disciplinary solutions in concert with other professionals on your team and giving more complete and confident recommendations to clients.
Technology can help. Many fintech platforms offer wizards to guide you and your clients through complex processes to successful completion, while templated forms can minimize your compliance risks and increase consistency in unfamiliar areas.
A Network Of Specialists
It will help you to have a virtual roster of experts who can complement your work and allow you to expand (and contract) the services you provide without additional overhead. This can be especially useful in specialty areas that may not pertain to your entire client base. For example, philanthropic consultants can assist you with activities such as setting goals, making grants, developing missions and researching nonprofits. There are also professional facilitators and psychologists who specialize in family or multigenerational dynamics and can add value and insights when you’re navigating complex topics such as succession planning.
When you help your charitable clients align their philanthropic, wealth management and legacy planning objectives, they’re better equipped to make decisions and it allows family members from different generations to forge connections that help strengthen and perpetuate the family legacy.
Advisors who add philanthropic expertise to their practices will help their practices evolve and create a more holistic approach to wealth management.
Hannah Shaw Grove is chief marketing officer for Foundation Source, the nation’s largest provider of specialized support services for private and family foundations.