Have you considered the importance of incorporating charitable planning as part of a holistic approach to financial planning? Sure, there are tax benefits to philanthropic activities, but actively pursuing these avenues can pay big dividends for your clients and your firm.

There are many ways you have learned to distinguish yourself from other advisors and create a niche. But the landscape is never static. It’s always changing.

According to a recently released RIA Benchmarking Study, advisors offering charitable planning tended to have significantly greater assets, organic growth and new money.

An analysis of over 1,200 RIAs and family offices found that those who offer charitable planning had 6x the median assets, 3x the median organic growth and 1.3x the median new money per investor as compared to advisors who don’t.

What about family philanthropy?

If your clients are younger, the contrast is even more stark. Two-thirds of millennials believe that charitable giving is a natural expression of their own values and beliefs, according to Giving USA Foundation.

Strategic philanthropy becomes a way to involve the younger generation. Advisors can frame multigenerational conversations around giving and the power impact investing can have, both to them and society. Heirs are more likely to respond if the plan centers around something they feel strongly about.

This is critically important.

Cerulli Associates estimates 33 percent of overall heirs and 42 percent of millennial heirs are more likely to stay with their benefactor’s advisor if he or she has helped with family philanthropy.

Instilling a sense of purpose helps clients and heirs ignite underlying passions that had previously been dormant. Maybe—and perhaps for the first time—they see they can make a difference.

Aligning financial goals and values

It’s up to you to light the fuse.

Not all clients will volunteer that they would prefer to see their core principles guide their overall portfolio. It may not be as simple as a client or prospect saying, “I want to retire comfortably, and I want my financial plan to line up with these causes.”

In fact, some may not be aware that their financial goals and values can be properly aligned. Understandably, they see return as the only guiding principle.

In some cases, it is up to you as the advisor to do the detective work. Ask them what’s important. Besides the material comforts, what does wealth mean to them? Listen for cues from your client.

This approach also allows you to step back from academic exercises and show your human side. Above and beyond your love for the wealth management field, clients want to know what makes you tick. It strengthens your bond with them and vice versa.

Once clients’ charitable causes are uncovered, you can tailor your advice around their priorities, incorporating strategic philanthropy into their overall plans.

Taking action with clients

Strategic philanthropy is a part of the comprehensive plan. But first, you must understand the client’s values.

Estate planning gives your clients the opportunity to leave a legacy. Let that guide opportunities to shift the conversation toward strategic philanthropy.

Impress upon them that charitable giving is more than just a tax deduction.

Finally, focusing on clients’ potential philanthropy is one more way you can add value and distinguish yourself.

Here to help

Think of The San Diego Foundation as an extension of your team.

Since 1975, we have helped wealth advisors and charitable-minded clients find ways to create positive impacts across San Diego and for the causes they care about.

Interested in learning how we can meet your financial planning and charitable giving goals? Contact me.

Jason Rogers, AIF®, CWS®
Director, Wealth Advisor Relations
(858) 245-1508