Advisors Discuss Philanthropy with Their Clients

For some advisors, the philanthropic talk can be challenging to initiate. Here are five steps to start the conversation with clients.

Family wealth advisors pride themselves on providing their clients with the most effective strategies and tools for planning their financial future. The best of these experts are versed in current tax laws and interest rates, and know exactly how a particular client can position himself or herself for the least tax consequence and the highest rates of return. However, many advisors neglect to discuss philanthropy with their clients.

There are a number of reasons why the subject of philanthropy goes unaddressed in advisor-client interactions. In some instances, the subject simply gets pushed to the back of a long line of complicated financial planning issues. If it is addressed, it's usually as an afterthought. At other times, the advisor may feel that the topic of charitable giving is too personal to bring up in conversation. Finally, some advisors hesitate to start the philanthropic conversation because they are not as familiar with charitable giving vehicles as they are with other tax-efficient planning techniques.

Doing Well by Doing Good
Still, most advisors are aware not only of the good that a charitable donor can bestow upon his or her community, but of the financial and tax benefits that a donor might enjoy through giving.

Compile a History of the Client. Like a doctor puts together a patient's history, an advisor must know all relevant background in order to help the client.

Determine the Client's Net Worth and Makeup of Assets. This information is essential to knowing the kind of planning that is available and advisable for the client.

Discuss Objectives and Goals. Do They Involve Charity? Only after knowing the client's overall objectives and goals for his or her wealth and legacy can the advisor suggest strategies to minimize taxes while passing on wealth to heirs and to charity.

Explore Personal Values. Is your client passionate about the arts? Education? Mental health? Is he or she an avid hiker? Birdwatcher? Knowing where your client's values lie will direct the philanthropic conversation.

Know The Options. Working with planned giving experts, explore the possible vehicles and approaches the client could take to achieve their philanthropic and financial goals.

Now you are ready to bring up the subject of philanthropy and begin the process of deepening your relationship with your client.

Adapted from an article for Community Foundations of America, copyright 2005. Used with permission

Carla E. Dearing

Posted at 9:30 AM, Dec 15, 2008 in Scaling Philanthropy | Permalink | Comment