As a financial adviser, your primary duty is to help your clients grow and protect their wealth. So why would you want to help those same clients give some of their money away?
Because it can help you become a more valuable, trusted adviser to your clients over the long term.
The latest neuroscience research tells us that giving to charity can actually make us happier, healthier people in general. When people purposely give to causes that are important to them, they develop a sense of agency—a belief that their actions can have a positive, meaningful effect on the world.
Financial advisers who recognise the innate desire of humans to ‘give back’ or improve life for others, help their clients become more fulfilled individuals overall.
So why aren’t more financial advisers introducing their clients to the benefits of integrating charitable giving into their wider financial plans? Many advisers are holding tight to a few myths common in the profession:
I’d be prying if I asked my clients about their charitable giving
Actually, many are waiting for you to ask!
A 2018 survey found that 58% of High Net Worth clients think advisers should bring up the topic of philanthropy in their first few meetings. Many individuals and couples already feel charitable giving is important, but are keen to have a plan for their giving. They want to know how much they can afford to give, the various ways they can structure their giving and how to choose charities that best fit with their passions and values.
There are natural ways to work the topic of charitable giving into client conversations. Certainly, it can be a topic for initial or annual client meetings, but raising it can also be an opportunity for you to demonstrate your knowledge of your clients and their interests. For example, you might say:
“Pamela, I know you volunteer as a guide at a local National Trust site. If this is a cause that’s important to you, we could talk about how you could afford to give to this or related charities in a more intentional way. Is this something that would interest you?”
Even if your client isn’t ready to talk about the issue today, you’ve planted the seed. And odds are, they’ll ask to revisit it later.
Only wealthy people should give to charity
When explaining the value of public service, Dr. Martin Luther King, Jr said, “Everybody can be great because everybody can serve.”
The same is true for charitable giving. The benefits of giving are the same regardless of how much you give. What’s important is that people feel a connection to the cause and feel that their gift is advancing it in some way.
So even enabling your more financially modest clients give £100 a year to save the wild gorillas—if that’s their passion—can have a meaningful impact on them…and on your relationship with them.
It’s best for people to give through their wills
Why? If you’ve done your job right—and I’m certain you have—then most of your clients can afford to give something to charity today and not run out of money by the time they switch from BBC Radio 1 to Radio 2.
While there are tax benefits to setting aside money in your will for charity, the overall benefit isn’t massive. What’s often much more valuable is the joy and sense of fulfilment that can come from having an impact on the issues that are important to a donor today.
So absolutely help your clients create a legacy plan that incorporates meaningful gifts to charities once they pass on.
But also work with them to create a giving plan for today—one that can include volunteering, sharing their passions with others and seeing the impact of their gifts while they’re still very much alive.
About and Resources
I’m Lauren Janus, a philanthropic adviser who partners with financial advisers when they have clients who want to become more intentional, fulfilled philanthropic givers. I’ve developed resources specifically for financial advisers over at Thoughtful Philanthropy and would love to know if they’re helpful to you. I can always be reached at email@example.com or @laurenjanus.
And, if you’re interested in helping your clients use their wealth to become happier and healthier overall, consider attending the first-ever Financial Wellbeing conference in Bristol on 19 June, where I’ll be a panel presenter. The conference will focus on how a more holistic approach to financial planning can help your clients focus on what really matters, enabling them to reap the most joy and fulfilment from their money.