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