Giving it Away

A recent survey suggests financial advisers have been slow to cater to a growing interest in charitable gift planning among their high net worth clients. In fact, many clients seem to feel their advisers' lack of advice and services are the reasons why they haven't made charitable gifts so far.

Late last year, Giving Capital, a New York-based developer of charitable investment and giving programs, surveyed 2,642 investors with at least $100,000 in investable assets about their charitable giving behavior. The survey found that a majority (73.6%) were interested in making a planned gift, though only 27.3% had actually done so.

Among those who had actually made planned gifts, many (81.6%) said their financial advisers were their most important influence. But among the majority who said they were interested and had not yet made a gift, many felt that they were inhibited by a lack of information and clear direction from their financial advisers.

Current adviser activity is restricted to the upper market level, according to Chris Blunt, chief executive of Giving Capital. "The high-end independent advisers have done a bit of work as far as charitable planning, but basic retail brokers and financial advisers have done very little there." He said the main reason why advisers weren't active was a lack of accessible products.

However, David Bohannon, a CFP with Consultants Corner in Louisville, Ky., believes the main reason is that it still falls outside an adviser's core activities. "Most planners have always been in the business of, first of all pre-planning what the amounts and needs of income and assets [are] for the future. And over the course of the relationship, it is managing those assets and putting them into primarily -- investments," he said. "It’s unusual for a planner to have made that move to say how can we distribute this in a charitable manner."

Bohannon said that many times it's the client who suggests a charitable gifting fund.

But Bohannon acknowledges that demand will increase for charitable gifting advice. "As more people have accumulated more assets, especially with interest rates being so low, charitable gifting is going to become a bigger part of a planners quiver of arrows," he said. He believes advisers will therefore need increased education and awareness programs.

Michael McMahan, of McMahan and Associates in Gastonia, N.C., says the real problem for clients is too much advice, because they typically listen to many sources when making gift decisions.

"The problem is the financial adviser is looking at it from an objective point of view … but the client is making a decision based on emotion," he said. "And then when that circumstance has been impacted by perhaps advisers giving different advice, then it becomes very difficult for the client to make a decision."

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Money Management Executive
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