Under the wealth management umbrella lies an important but sometimes missed opportunity that can open the door for deeper, more meaningful conversations with your clients: philanthropic planning. Taking the time to discuss this topic allows you to tap into the totality of your clients’ interests and ideals. It can also help inform other aspects of their overall wealth management plans, which can ultimately grow an advisory practice.
Besides giving your clients superior service, another reason to start philanthropic planning conversations now is that we’re on the precipice of the largest generational wealth transfer. Connecting with the next generation today means heading off a potential asset flight in the future.
So what’s the best way to get started? Recently, Elizabeth Wong, our national director of philanthropic advisory services, and Julia Reed, national director of charitable consulting for Schwab Charitable, presented a webinar about how philanthropy can fit seamlessly into a wealth management practice.
Here are some tips from Elizabeth for advisors to use when engaging clients around philanthropy.
Incorporate Philanthropy into Wealth Management
While advisors are eager to introduce a variety of topics to their clients, charitable giving isn’t always one of them. But if you are not talking about philanthropy with your clients, someone else is. And doing so positions you as a professional who can address the entirety of your clients’ financial needs.
Put charitable giving in the context of other wealth planning tools like insurance or estate planning. Leading with purpose gives clients a framework to think about what they want to accomplish with their resources both in their families and communities.
Advisors can use also periods of transition to introduce charitable giving, such as when clients are selling a business or retiring. Foundation Source recently worked with a family that had a foundation, although it wasn’t a front-burner issue for them. That changed when they sold the successful business they had been running for 25 years. We showed them how the foundation could be a receptacle for assets from the sale and an opportunity to redefine and re-orient around their purpose. The foundation has since grown tenfold.
The tax benefits of philanthropy can also be a motivating factor for some clients, although it may not resonate with all.