Trust Mat­ters

It’s more quan­tifi­able than you think — and more valu­able.

Financial Planning - - Editor’s View - — Chelsea Emery

Ad­vi­sors strug­gle with an in­her­ent dilemma when their clients do­nate sig­nif­i­cant sums to char­ity. The more those clients give, the fewer as­sets plan­ners have to man­age.

It’s worth over­com­ing the re­luc­tance. More than three-fourths of ad­vi­sors say they no­ticed a pos­i­tive im­pact to their bot­tom line af­ter talk­ing with clients about phi­lan­thropy, ac­cord­ing to a 2018 U.S. Trust study. That’s be­cause, in part, these dis­cus­sions fos­ter trust over­all, as well as build loy­alty with younger clients who want to pri­or­i­tize so­cial-im­pact in­vest­ing.

“Clients want guid­ance from their ad­vi­sors about how to vet and se­lect causes, but many ad­vi­sors are un­aware or un­pre­pared to meet this need,” writes Fi­nan­cial Plan­ning Se­nior Ed­i­tor Kerri Anne Ren­zulli in the main fea­ture, “Give Away Clients’ Money — Yes, Re­ally.”

How to go about meet­ing this need? Build trust, first, Ren­zulli urges. Clients may be wary of be­ing judged for how lit­tle they give, or to which causes. Then, lead by ex­am­ple. Daniel An­drews, the founder of plan­ning firm Well­rounded Suc­cess, asks clients to help him se­lect the char­i­ties he sup­ports.

“Ev­ery year, I give away 2% of my com­pany’s top-line rev­enue to a char­ity my clients choose,” he tells Ren­zulli. “I feel like it dis­arms clients. It sets the tone that money is im­por­tant but that I also feel it is im­por­tant to give back.”

Trust is also vi­tal when it comes to how your prac­tice han­dles data. What do you say when clients ask who owns their in­for­ma­tion and what is done with it? Do you even know your­self? Re­gard­less of your an­swer (if you have one), colum­nist Bob Veres sug­gests a so­lu­tion in his piece, “Who Owns Clients’ Fi­nan­cial Data?”

Cre­ate an on­line fil­ing ac­count in each clients’ name, he sug­gests. This ac­count ide­ally holds the port­fo­lio’s per­for­mance his­tory, the fi­nan­cial plan and other data.

“Es­tab­lish this shar­ing of data as a pro­fes­sional norm,” Veres writes. ”That way, clients know their data is go­ing to be safe and avail­able.”

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