More financial advisors have been engaging their clients in charitable planning discussions, driven by changing legislation, shifting client priorities, and a growing awareness of the financial advisor’s role in expanding philanthropy.
There are many compelling reasons why financial advisors should embrace these discussions and have them regularly. The top 10 benefits of having charitable planning conversations with clients include:
- Strengthening Client Relationships
- Deepening Client Interactions
- Furthering Discussions to Include the Client’s Family
- Differentiating Your Services
- Increasing Assets Under Management
- Simplifying the Client’s Donation Experience
- Creating Longer-Lasting Engagement
- Improving the Rate & Timing of Donations
- Enhancing Operational Efficiency
- Expanding Your Professional Network
1. Strengthening Client Relationships
Initiating charitable conversations demonstrates genuine interest in clients beyond managing their assets, fostering deeper connections and trust. Gaining a client’s trust is immensely valuable and will allow you to make honest suggestions for charitable planning.
2. Deepening Client Interactions
By engaging clients in discussions about their charitable goals, financial advisors can expand their involvement in the financial planning process and align strategies with clients’ values. Letting a client know that you understand the causes that are important to them will open further avenues for discussion.
3. Furthering Discussions to Include the Client’s Family
Cultivating relationships with a client’s spouse and children via charitable conversations increases the likelihood you will retain – and even gain – business across generations. Accepting input from loved ones and including them in conversations raises trust from all parties, ensuring a long and healthy relationship.
4. Differentiating Your Services
Incorporating charitable planning into advisory services sets you apart from competitors, providing a unique value proposition that resonates with clients and prospects. While there are more advisors doing this now than before, the personal touch that shows you care about a client’s legacy will set you apart.
5. Increasing Assets Under Management
Charitable planning discussions can lead to additional assets under management as clients seek guidance on donating illiquid assets or previously unmanaged assets that financial advisors can manage through a donor-advised fund (DAF).
6. Simplifying the Client’s Donation Experience
Some clients are unaware of the different types of assets they can donate. Through charitable planning, financial advisors can assist clients in donating illiquid assets, such as privately held securities or real estate, expanding their scope of charitable giving options.
7. Creating Longer-Lasting Engagement
Charitable conversations create ongoing, positive dialogue focused on clients’ passions and values. Shifting the focus from market fluctuations to meaningful philanthropic impact garners a much stronger, more sustainable level of engagement.
8. Improving the Rate & Timing of Donations
Once advisors have opened up the charitable planning conversation, they can encourage clients to make donations throughout the year rather than just in Giving Season (November and December), reducing year-end stress and streamlining administration.
9. Enhancing Operational Efficiency
Recommending donations to DAFs or facilitating donations of appreciated assets minimizes administrative burdens for financial advisors and their staff.
10. Expanding Your Professional Network
Collaborating with clients’ accountants and attorneys on charitable planning enhances advisor-client relationships and increases the likelihood of cross-referrals.
If you’re a financial advisor and would like more information about DAFs to share with your clients, please contact us today.