Advisors are becoming more influential in their clients’ decisions on philanthropy, according to a U.S. Trust study released Thursday.
More than three-fourths (76 percent) of clients who discussed philanthropy with their advisors rated the advisor’s ability to discuss their personal values and charitable goals as “strong,” according to the “U.S. Trust Study of the Philanthropic Conversation.”
Five years ago in a similar study, 63 percent of clients gave their advisors the same high ranking. The 2018 study included 314 advisors, such as wealth advisors, trust and estate attorneys, accountants and tax professionals, and 103 individuals with $3 million or more in investable assets who are actively engaged in charitable giving.
Seventy-eight percent of advisors in the study said having discussions about philanthropy with their clients helped them build a better relationship with new clients, deepened existing relationships and helped build relationships with their clients’ extended families.
Advisors can make their philanthropic conversations with clients even more meaningful by starting the conversation earlier in the relationship. Advisors should also skew the conversation so it is of a more personal nature to the client and not just about the technical side of giving. Meanwhile, advisors should also increase their knowledge of both giving vehicles and charities, the study said.
Almost all of the advisors in the study (91 percent) believed discussing philanthropy with their clients is important, and 53 percent said it’s very important. Ninety-four percent of advisors discuss philanthropy with some of their clients, including 44 percent who discuss it with a majority of their clients.
Only 7 percent of clients intend to change their giving because of the recent income tax changes.
“Clients rely heavily on their advisors for guidance with their giving. It is encouraging, therefore, to see more advisors recognizing the importance of philanthropy to their clients and a corresponding uptick in the number of philanthropic conversations taking place,” said Claire Costello, national philanthropic practice executive for U.S. Trust, in a statement.
“Advisors who approach these conversations in a meaningful way—focusing on personal goals and passions as well as the more technical aspects of giving—are more likely to satisfy their clients’ philanthropic needs while also growing their business,” she added.