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Top 3 Reasons Wealth Advisors Should Talk to Clients about Philanthropy

Author John Canady, Chief Executive Officer

September 15, 2017

Talking to clients about their charitable giving is often a ‘no-go’ area for wealth advisors, particularly in the UK. Many advisors consider it unseemly or intrusive to ask clients about their private giving. Although they wouldn’t phrase it this way, others worry that if they bring up giving, the client will divest assets to fund their philanthropy.

Charitable giving is not new for clients. Those who are charitably inclined have always given—sometimes very substantial amounts—and often without involving their wealth manager. By not discussing charitable giving with their clients, most advisors are missing an opportunity. The wealth advisors who can guide their clients on philanthropy and impact investing will:

  1. Experience higher client satisfaction. According to a State Street Global Advisors report, clients with advisors who guide them on philanthropic planning are 40% more likely to be very satisfied with their advisors. Advisors do not have to be subject matter experts; clients value advisors who help them find philanthropic experts and who integrate giving into their discussions.
  2. Raise retention rates. Conversations about philanthropy expand to topics well beyond investments. I’m often in meetings with clients and advisors where the client discusses stories and insights that the advisor has never heard before. By listening to these stories behind the client’s motivations for giving, an advisor can strengthen his or her relationship with the client and bond over their common humanity.
  3. Involve the next generation. Younger clients often place a higher importance on aligning their investment strategies with their values and beliefs. Philanthropy picks up where their impact investing or socially responsible investment choices end. To engage these clients, the advisor needs all the tools—including philanthropic solutions.

The advisory world is facing big changes, not just in the technology we use but also in how clients and advisors interact. The ability to help clients use their financial capital for good is shifting from a ‘nice-to-have’ to a ‘must-have’ requirement for wealth advisors.