Deepening the adviser-client relationship

A conversation with a client about charitable giving can provide insight into the client’s values and perhaps what kind of legacy they want to leave behind.

But some financial advisers aren’t framing the discussion well.

Advisers think first about the tax implications of giving, while clients are more focused on what the giving is accomplishing in the world, said David M. Foster, founder of Gateway Wealth Management. 

“There’s a disconnect between most advisers and their clients on this topic,” Foster said. “For the most part, people are not giving money for the tax deduction, they’re giving it because they want to use their good fortune to impact those who haven’t been as fortunate.”

The surge of charitable giving since the beginning of the coronavirus pandemic last year creates both challenges and opportunities for advisers.

Charitable planning is one of the most popular value-added services offered by advisers, according to a 2020 benchmarking study by Schwab Charitable.

Clients “want to achieve the same kind of impact with their charitable giving as they do with their other investments,” said Fred Kaynor, vice president of business development and marketing at Schwab Charitable. “It’s an extremely effective way for [advisers] to broaden these relationships.”


Discussing charitable giving also can help advisers build rapport with female clients. A recent Fidelity Charitable study showed that following the pandemic, 84% of women said giving is important, up from 75% prior to the pandemic.

But many women aren’t giving in a tax-efficient manner. The Fidelity survey found that among women who owned stocks and bonds, 35% did not know they could donate appreciated assets directly to charity, which would help them avoid capital gains taxes and make bigger contributions.

“This is a tremendous opportunity for advisers to close that knowledge gap and help their clients with strategies for giving,” said Kristen Robinson, chief operating officer at Fidelity Charitable.

Only 14% of women have talked about giving strategies with advisers compared to 20% of men, the Fidelity study found. Starting that conversation about philanthropy “allows the adviser to support the client in a more holistic way,” Robinson said.

Introducing clients to tax-efficient ways to give, such as using a donor-advised fund, can help them do more with their gifts. But charitable intent, rather than tax benefits, should be the primary motivation for clients to give.

“I don’t think the tax tail should wag the [charitable] dog,” said Greg Giardino, a financial adviser at J.M. Franklin & Co.

The money charitable giving saves on taxes is a happy dividend.

“For my clients, it starts with their values around giving,” said Fredrick Standfield, founder of Lifewater Wealth Management. “Tax planning is a byproduct of giving.”

Charitable giving should be part of anyone’s financial plan, said Laura MacDonald, chair of the Giving USA Foundation.

“How do you go from success to significance?” MacDonald said. “I don’t think that’s by being able to count more money. When someone makes a charitable gift, it makes them feel good. It’s not just transactional, there’s also a significant emotional element to it.”

That’s the aspect of giving that Roger Oprandi, managing director of Oprandi Wealth Group, stresses.

“I will encourage every client to give during their lifetime to feel the love when they do,” he said.

The post Deepening the adviser-client relationship appeared first on InvestmentNews.

Andrew is half-human, half-gamer. He’s also a science fiction author writing for BleeBot.

Andrew Vincent
Andrew is half-human, half-gamer. He's also a science fiction author writing for BleeBot.
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